Probabilities: Risk of Ruin

Came across an interesting Article,

http://2ndskiesforex.com/articles/mo...-risk-of-ruin/

Would appreciate insights regarding the accuracy of their claims?

for example.. sometimes I feel like you have to cut a trade short based on various data.. however here they claim that exiting before 2:1 reward is always the wrong decision because more often then not you will be wrong to exit early. (their statements make forex seem very rigid where as I often feel it is much more flexible and requires constant adaptability.. I agree yet disagree with them.. hmm...)

Hopefully someone will shed light into this

Enjoy,
NY

It's a numbers game based on the probability of your trades you can have a lopsided risk reward and you will have more winning trades but bigger losses. with a tight risk reward you will have more losses and bigger wins.
It's possible to get the same results either way.

I do agree that if you take your profit early you are losing your edge because your not changing your stoplosses. If you have a system based on 2:1 ratio you have to keep that ratio. Especially if it is backtested and you no the past results.

Also if you are risking 10 percent per trade good luck. The whole point is to preserve capital to live to trade another day. If you toss a coin up ten times you have a 50/50 chance on it landing on heads or tales. Does not mean to say that you are going to get a 50 percent chance of being right.
you could get unlucky and the coin can land on tales 8 out of 10 times. thats risk to ruin. If you have an edge it will show over many trades. You might though get wiped out before you even realise you hade an edge because you traded to heavy. Don't let bad luck wipe you out. Don't let luck interfere with trading skill.

Well, I like the idea of
"It is psychologically hard to deal with big losses but little losses have a much smaller impact on your emotions and trading" (source: 1)
and it fits with splitting up one's trades into little bits, which I'd like to learn to do.

one take (replacing RoR with W:L and normalizing between trades) --
0-50 you're a goner, 50-65 you're in trouble, and 65+ you're okay. Got it.
And to increase %/Hr, increase R:R.

What the fuck? I am not a commercial member or trying to sell shit in any which way.. so fucking lame...

next time I'll just plagiarise shit and play it off as my words so I don't get up here in commercial forum.. fucking lame