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1:1 Risk Reward Ratio - Why it just makes sense

  • #61
  • Jun 8, 2012 8:16pm Jun 8, 2012 8:16pm
Quoting jimmyjames79
I should say easier for me!

Have a good one!


Likewise to you.
When the Joker is in the deck.. fear not and play it well
  • #62
  • Jun 8, 2012 10:01pm Jun 8, 2012 10:01pm
Well it seems like the conventional wisdom of century-old maxims like "cut losses short, let profits run" and "quality not quantity" has apparently been invalidated by some FF members......but in traditional forum discussion style the awkward questions and challenges receive the standard "it works for me" response! Outstanding!

People can tweak all the settings they like in an MT4 backtest to make the results look good but logic, if nothing else, should at least provide a clue about the superior productivity of letting profits run over cutting profits short!

Sorry did I say 'logic'.....
  • #63
  • Jun 8, 2012 10:30pm Jun 8, 2012 10:30pm
Quoting pipmutt
Well it seems like the conventional wisdom of century-old maxims like "cut losses short, let profits run" and "quality not quantity" has apparently been invalidated by some FF members......but in traditional forum discussion style the awkward questions and challenges receive the standard "it works for me" response! Outstanding!

People can tweak all the settings they like in an MT4 backtest to make the results look good but logic, if nothing else, should at least provide a clue about the superior productivity of letting profits run over cutting...
What do century-old maxims and/or logic have to do with anything? Is this not the "new age" when investment bankers are paid hilarious sums for throwing logic out the window and taking huge risks.

Should we as traders, be able to do the same? And what's wrong with "works for me"?
If two traders had exact opposite methods and both made (similar) money over a 20 year period it worked for both of them.

Correct?
When the Joker is in the deck.. fear not and play it well
  • #64
  • Jun 8, 2012 10:50pm Jun 8, 2012 10:50pm
Quoting Slim Buffett

What do century-old maxims and/or logic have to do with anything?
They've stood the test of time, are infinitely more productive, and make perfect logical sense.


Quoting Slim Buffett

Is this not the "new age" when investment bankers are paid hilarious sums for throwing logic out the window and taking huge risks.
Yes it is, and the world is still reeling from the catastrophic effects!


Quoting Slim Buffett

Should we as traders, be able to do the same? And what's wrong with "works for me"?
'Works' is fine if you're satisfied to rest on your laurels and limit your potential.


Quoting Slim Buffett

If two traders had exact opposite methods and both made (similar) money over a 20 year period it worked for both of them.

Correct?
If.....
  • #65
  • Jun 8, 2012 10:58pm Jun 8, 2012 10:58pm
Quoting pipmutt
They've stood the test of time, are infinitely more productive, and make perfect logical sense.

Yes it is, and the world is still reeling from the catastrophic effects!

'Works' is fine if you're satisfied to rest on your laurels and limit your potential.

If.....
That's almost a good reply and pretty much as expected. You're predictable.

Someday you'll get the rest of it.
When the Joker is in the deck.. fear not and play it well
  • #66
  • Jun 8, 2012 11:05pm Jun 8, 2012 11:05pm
Quoting Slim Buffett

That's almost a good reply and pretty much as expected. You're predictable.
Thanks, and yes my opinions on trading and the market are clear, unambiguous, logical, consistent, and therefore probably quite predictable.

Whereas......

Quoting Slim Buffett

Someday you'll get the rest of it.
?
  • #67
  • Jun 8, 2012 11:18pm Jun 8, 2012 11:18pm
Hi Pipmutt, just a question because I'm not sure I understand your stance on the matter 100% clearly.

Do you think that someone who is making consistent profits with a 1:1 R/R is wasting potential? And if yes, would you advocate them to change?
It's my price or no price at all!
  • #68
  • Jun 8, 2012 11:20pm Jun 8, 2012 11:20pm
Quoting pipmutt
Thanks, and yes my opinions on trading and the market are clear, unambiguous, logical, consistent, and therefore probably quite predictable.
You're welcome. I thought you might be able to clear that up.
You've almost redeemed yourself.

Now what are you going to do?
When the Joker is in the deck.. fear not and play it well
  • #69
  • Jun 8, 2012 11:33pm Jun 8, 2012 11:33pm
Quoting Slim Buffett

Now what are you going to do?
hint; you could say "I'll behave like the good little pup that I am"

but you probably won't
When the Joker is in the deck.. fear not and play it well
  • #70
  • Jun 8, 2012 11:43pm Jun 8, 2012 11:43pm
Quoting Slim Buffett

Now what are you going to do?
Reply to 4extool, it's the way discussions work......
  • #71
  • Jun 8, 2012 11:44pm Jun 8, 2012 11:44pm
Quoting 4extool

Do you think that someone who is making consistent profits with a 1:1 R/R is wasting potential?
If the market offers more for the same (or even less) risk yet someone intentionally limits themselves to 1:1 then yes, wasting their own potential and the potential profit offered by the market.


Quoting 4extool

And if yes, would you advocate them to change?
I think it's only natural to want to encourage anyone to aspire to be the best they can at anything they do, but then some people don't have the drive or ambition to progress further. We're probably all guilty of it to some degree or other in our lives but it doesn't make it 'right'.
  • #72
  • Jun 8, 2012 11:52pm Jun 8, 2012 11:52pm
Quoting pipmutt

but then some people don't have the drive or ambition to progress further. We're probably all guilty of it to some degree or other in our lives but it doesn't make it 'right'.
And what does that have to do with consistency or potential?

Be specific please.
When the Joker is in the deck.. fear not and play it well
  • #73
  • Jun 8, 2012 11:56pm Jun 8, 2012 11:56pm
Quoting Slim Buffett

And what does that have to do with consistency or potential?

Be specific please.
What, you don't see the connection between the drive or ambition to progress further and potential?

Be specific please.
  • #74
  • Jun 9, 2012 12:10am Jun 9, 2012 12:10am
Quoting AllanS
That's very helpful. How far can you follow this line of logic? What happens if you trade 1:0.5 and increase your win rate even further?

One thing is certain. Once I'm in profit and close the position, I have that profit. If I wait for more, I may well get less. In fact, the more I hope for, the less my chance of getting it. At every point I ask myself, "Is the chance of getting more out of this trade greater than 50%?" If I've no good reason for thinking it is, I'm basically tossing a coin at that decision point, and so I exit.
Well, It is of course possible to trade profitably with a greater risk than reward. Boris Schlosesenberg aims for 35 pips with a 50 pip stop and is profitable with a little better than 70% win rate.

I am not going to go there myself cause I dont need to. I have spent years developing the skill and method to select entries that will return at least equal my risk, more than 60% of the time. Personally, I cant think of anything worse than one loser wiping out the gains of two or more winners so a system like that is just not for me
BTC Return This Year: na
  • #75
  • Jun 9, 2012 12:10am Jun 9, 2012 12:10am
Quoting pipmutt
What, you don't see the connection between the drive or ambition to progress further and potential?
Of course there's a connection but not in the context of your aforementioned replies.

Quoting pipmutt
Be specific please.
Now you're just sounding like a parrot. Not at all what I expected from you.
You're better than that?
When the Joker is in the deck.. fear not and play it well
  • #76
  • Jun 9, 2012 12:17am Jun 9, 2012 12:17am
Quoting Slim Buffett

Of course there's a connection but not in the context of your aforementioned replies.
How so? If there's potential for better but no drive or ambition to aspire to achieve better then it (potential) is wasted, no?


Quoting Slim Buffett

Now you're just sounding like a parrot. Not at all what I expected from you.
You're better than that?
Ah I see, it's only ok for you to ask for specifics and clarity......my bad
  • #77
  • Jun 9, 2012 12:41am Jun 9, 2012 12:41am
Quoting pipmutt
How so? If there's potential for better but no drive or ambition to aspire to achieve better then it (potential) is wasted, no?
Yes. But that (potential, drive, ambition) is not what this thread is about. Can't you see that? Perhaps you could start a "Potential, Drive, Ambition" thread. I'll be happy to contribute.

Quoting pipmutt
Ah I see, it's only ok for you to ask for specifics and clarity......my bad
Of course. It's only logical.
When the Joker is in the deck.. fear not and play it well
  • #78
  • Edited 1:07am Jun 9, 2012 12:51am | Edited 1:07am
Quoting Slim Buffett

Yes. But that (potential, drive, ambition) is not what this thread is about.
Sure, but different topics crop up in a discussion and can be relevant, anyway I think it was in direct reply to a question from 4extool asking "Do you think that someone who is making consistent profits with a 1:1 R/R is wasting potential?", I thought it only polite to reply.


Quoting Slim Buffett

Perhaps you could start a "Potential, Drive, Ambition" thread. I'll be happy to contribute.
As tempting as that offer is I think I'll decline thanks.



Quoting Slim Buffett

Of course. It's only logical.
Of course.....oh sorry I can't say that for fear of repeating what you said, I mean yes, it's only logical.....dammit I've done it again. I know, yes it's warped logic, there!
  • #79
  • Jun 9, 2012 1:06am Jun 9, 2012 1:06am
Quoting pipmutt
I thought it only polite to reply.
LOL !!! That would be a first... when you were concerned about being polite.

LIAR !!!

Quoting pipmutt
Of course.....oh sorry I can't say that for fear of repeating what you said, I mean yes, it's only logical.....dammit I've done it again
Don't live in fear. Get it all out. You're getting ever so closer.

congrats !!!
When the Joker is in the deck.. fear not and play it well
  • #80
  • Jun 9, 2012 1:12am Jun 9, 2012 1:12am
Quoting Slim Buffett

LOL !!! That would be a first... when you were concerned about being polite.
Well quite obviously back when I thought it was polite to reply to 4extool!


Quoting Slim Buffett

LIAR !!!
Nice, and so politely put!


Quoting Slim Buffett

Don't live in fear. Get it all out. You're getting ever so closer.

congrats !!!
You're right of course, how could anyone possibly fear your wrath! Thanks, I feel so much more relaxed now.....

congrats !!! (repeated without a care!)
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