Just doing some calculations on risk multiples and profitiability on one of my trading systems.
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The system gives 75% wins (which isn’t bad), 10% breakeven and 15% full risk losses with an average RM of only around 0.5 – so for every $1 I risk I only make $0.50.
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It would only take a small slip in the performance of the system to make it a lot less profitable and not worth while trading.
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With the RM of this system, to make reasonable money I would have to increase the risk substantially and when losses come (as I know they do) they will hurt?
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Any thoughts or ideas from those more experienced traders out there as to how the RM and profitability can be improved?
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Thanks
<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o
The system gives 75% wins (which isn’t bad), 10% breakeven and 15% full risk losses with an average RM of only around 0.5 – so for every $1 I risk I only make $0.50.
<o
It would only take a small slip in the performance of the system to make it a lot less profitable and not worth while trading.
<o
With the RM of this system, to make reasonable money I would have to increase the risk substantially and when losses come (as I know they do) they will hurt?
<o
Any thoughts or ideas from those more experienced traders out there as to how the RM and profitability can be improved?
<o
Thanks