Your Risk/Reward Level? | Forex Factory

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Your Risk/Reward Level?

  • #1
  • First Post: Apr 11, 2019 8:47pm Apr 11, 2019 8:47pm
Hi,

I'm in the process of studying the daily time frame for trend trading and I'm curious to know everyone's R/R. Coming from the H4 time frame, I would trade with a 1:2. I'm curious to know if trading on a higher time frame should be treated any different.
  • #2
  • Apr 12, 2019 3:22am Apr 12, 2019 3:22am
Quoting MoneyEyes
Hi, I'm in the process of studying the daily time frame for trend trading and I'm curious to know everyone's R/R. Coming from the H4 time frame, I would trade with a 1:2. I'm curious to know if trading on a higher time frame should be treated any different.
I use tight stops and RR ranges from 1:3 up to 1:5.

You can use trail stops succesfully.. still the RR of a trend follower is at least 1:2 in order to best exploit the "fat tails".
  • #3
  • Apr 12, 2019 3:31am Apr 12, 2019 3:31am
R:R is flawed. Nobody knows how much reward the market will give you so to presume you have an amount of reward on the table is like predicting you will find a 10 buck note on the street tomorrow. Forget R:R and focus on risk and take what the market gives which means you need to build a trade management strategy that gives you real-time feedback on when to exit a trade.
  • #4
  • Apr 12, 2019 3:46am Apr 12, 2019 3:46am
I wanted to add: for longer term I used a RR of 1:8. however, with this low volatility I experienced so many consecutive losses that since the beginning of 2019 I just said goodbye to long term (and I didn't regret it).
  • #5
  • Apr 12, 2019 4:13am Apr 12, 2019 4:13am
let me explain why trailing a stop is also an inefficient way to manage a trade. By trailing you giving up profit that you could have booked. The chances of price breaking a level when it sits there for a period diminishes over time.
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  • #6
  • Last Post: Apr 12, 2019 6:03am Apr 12, 2019 6:03am
Quoting HeyYou
{quote} I use tight stops and RR ranges from 1:3 up to 1:5. You can use trail stops succesfully.. still the RR of a trend follower is at least 1:2 in order to best exploit the "fat tails".
When I traded H4, it was 1:2. But I’m seeing if I’m ok to wait 2-3 days for ny TP to be hit, trading a 1:4 is reasonable.
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