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

  • #161
  • Edited 7:56pm Jun 10, 2012 7:07pm | Edited 7:56pm
Just to elaborate! Lets say you have an x amount of money in a long trade. The trade ends up working for you. You net 600 pips holding the trade. I trade the same amount of capital and i trade the same move. Except I exit and short buy back long and so on. Basically trading the fractals of the entire move. I have the ability to net more pips with my entire account trading fractals as part of your account is stuck through the ups and downs. So yeah you can use available margin and trade short term along with your long term capital but your account is at a dis advatage as far as maximizing potential through the compounding process

Does this make sense!

I did not say this is easier. I don't look for the full trend I look for probable fractals during the trend. We are still in the same trade i just exit and reenter with the entirety of my account with reasonable risk measures.
My trades are 100% profitable 65% of the time!
  • #162
  • Edited 8:34pm Jun 10, 2012 8:24pm | Edited 8:34pm
Quoting jimmyjames79

Does this make sense!
No, not really. Are you saying you use all your available equity as margin? If yes then your risk is financial suicide, if no and you're only using a percentage then what's to stop me doing the same? I'm trading the long term trend as well as the short term 'fractals'. So in your example I'm getting 600 pips plus the same trades as you which is another ~600 pips. In your example we're both using the same margin and same trade size. Who ends up with more profit?

It's a bit of a pointless hypothetical tho' and is straying off the original point somewhat.


Quoting jimmyjames79

I did not say this is easier. I don't look for the full trend I look for probable fractals during the trend. We are still in the same trade i just exit and reenter with the entirety of my account with reasonable risk measures.
So what would you do if let's say you see a nice trend developing? You're not looking for it but there it is, jumping right out of the chart at you. Ignore it and carry on trading fragments of it? If yes, why?
  • #163
  • Jun 10, 2012 8:43pm Jun 10, 2012 8:43pm
Pip mutt

90% of my trades are fixed with a 1:1 RR. I do intervene before news reports and a few technical reversals. I used to take less profit then risk.

I do not make 6000% per year never claimed to. I average 25 to 30% a month and compound daily. I should have stated that the daily stats were based on the last three months of trading. As this is when i started to stat track. Last month I had a much higher then normal return. Bought puts against a few stocks at the beginning of may.

Also you insulted me just the same. Laughing at some personal information that i have revealed is an insult.

As far as the maximizing profits comment. I was insinuating that trying to maximize profits can work against you as well. Apparently you manage your trades well so that's your wheel house. I should of left that one out.

Anyhow if you look at my post history. I try to treat people with respect and don't run many debates that aren't resolved in a good way. This has been the longest debate i have ever had.

So yeah lets not be childish. You trade by ear I systems trade manually with slight intervention. They are two different methods of trading. So really we are trying to compare apples to oranges.
My trades are 100% profitable 65% of the time!
  • #164
  • Jun 10, 2012 9:18pm Jun 10, 2012 9:18pm
Quoting jimmyjames79

I am not stuck at an even R:R I just initially strategize around
an even R:R

90% of my trades are fixed with a 1:1 RR

Quoting jimmyjames79

Averaging .5 to 1 percent a day in the forex market and a little more then 1% per day in the stock market.

I average 25 to 30% a month and compound daily.

Quoting jimmyjames79

So really we are trying to compare apples to oranges.
Apples, oranges, fairy dust......

No matter how you slice and dice it the bottom line is allowing profits to run makes more financial and logical sense than cutting profits short.

This discussion is getting a little disjointed, or maybe it's just you don't want to answer leading questions?
  • #165
  • Jun 10, 2012 9:21pm Jun 10, 2012 9:21pm
Quoting pipmutt
And yet another person might think they made a wise move by staying in the trade and exploiting the market for what it has to offer, why cut profits (short) without the market giving a valid reason?




So do I, and that's why I believe the failure stats are so high, the vast majority think that finding a tool to predict direction accurately is key to profitability.

I really fail to see the value of statistically analysing a systems historical performance when no two trades are ever the same. If someone needs those numbers as a crutch to...
My response to that would be becasue most traders use backtesting or history to give them confidence in their system because many sytems or methods rely solely on probability....so if you have backtested your system you know that it works a certain percentage of the time and you can also work on your drawdowns, SL's and TP's etc to fine tune it. Please dont think I am being critical at all pipmutt...in fact your post has me extremely curious as to what gives you the confidence to trade your method if you havent tested it or backtested?? I ask becaseu I have tried this and failed badly....so the answer for me is backtesting and for many others too....so what is it you do to get that confiedence to enter a trade??
  • #166
  • Edited Jun 11, 2012 1:15am Jun 10, 2012 9:36pm | Edited Jun 11, 2012 1:15am
Pip mutt

It is you that does not understand. You are fixed on letting winners ride let winners ride let winners ride. It's only smart to let winners ride. It's a no brainer to let winners ride over and over again.

I will open a demo account with a lopsided R:R. I will risk 2 % to gain 1%.

You open one up with your let winners ride and lets see who returns more in 6 months.

Risk has to be the same per trade. That's It. 2% risk per trade sound good.

I can trade any R:R and have similar results any which way. You seem to only have one skill. What was it. Oh yeah let winners ride.

This shall be entertaining for all the viewers of the never ending debate.
My trades are 100% profitable 65% of the time!
  • #167
  • Jun 10, 2012 9:41pm Jun 10, 2012 9:41pm
Quoting 4extool
ok pipmutt, I just wanted to understand it clearly. I don't think it would be strange for you to make suggestions to someone who is, according to you, wasting potential, in other words; leaving pips on the table.

I'll be the first to admit that this could be a revelation for some people. But would you agree with me that to go after that extra potential, someone people could be forced to step out of their comfort zone and with that do more harm than good?

It happened to me and I can say that; it's not only where you want to go, but it's also...
THe single biggest mistake anyone could make here is to take another persons advice on how to trade. NOt only are most here just faceless people you know nothing about, but they have no clue as to your trading personality and your pain tolerance amongst many other factors....if you or anyone else for that matter uses a method or system that you are comfortable with and makes your trading both profitable and stress free....who cares whether anyone else thinks you are limiting your potential.....its completely irrelevant....trading is about finding a profitable method to suit YOU....and YOU only. IF thats what you have found....sensational....work on refining your own method to increase profitability or whatever....it sounds like to me you have done pretty well so far....keep it up. Its important to bear in mind that you are communicating via a forum full of anything from brand new traders, sheister salesmen, old hand succesful traders, to muppets who use them to stir up trouble along with a myriad of other personalities......one thing you can rest assured these forums should NOT be used for....is taking trading advice directly from someone you dont know. Good luck to you all with your trading.
  • #168
  • Jun 10, 2012 9:52pm Jun 10, 2012 9:52pm
Quoting dean

....so the answer for me is backtesting and for many others too....so what is it you do to get that confiedence to enter a trade??
Backtesting....pretty meaningless in the scheme of things. Trades are unique, markets change, no two set of circumstances are identical.

What gives me the confidence? Focussing on 'trading' rather than rely on backtest results for some system, strategy, or indicator which supposedly predicts direction and makes me theoretical money.
  • #169
  • Jun 10, 2012 9:53pm Jun 10, 2012 9:53pm
Quoting dean
THe single biggest mistake anyone could make here is to take another persons advice on how to trade. NOt only are most here just faceless people you know nothing about, but they have no clue as to your trading personality and your pain tolerance amongst many other factors....if you or anyone else for that matter uses a method or system that you are comfortable with and makes your trading both profitable and stress free....who cares whether anyone else thinks you are limiting your potential.....its completely irrelevant....trading is about finding...

LOL...I like this..Give advice and then proceed to say dont take my advice...

Just sayin..



BTW my moneys on Mutts.
Master your Mind,,,Master the Market
  • #170
  • Jun 10, 2012 9:56pm Jun 10, 2012 9:56pm
Quoting pipmutt
Backtesting....pretty meaningless in the scheme of things. Trades are unique, markets change, no two set of circumstances are identical.

What gives me the confidence? Focussing on 'trading' rather than rely on backtest results for some system, strategy, or indicator which supposedly predicts direction and makes me theoretical money.

Can you elaborate? It kinda sounds like you just jump in when you feel like it? Or price action?? Like Dean, I am genuinely curious.
  • #171
  • Jun 10, 2012 9:59pm Jun 10, 2012 9:59pm
Quoting bluesteele
LOL...I like this..Give advice and then proceed to say dont take my advice...

Just sayin..



BTW my moneys on Mutts.
I'm sure it is since you like to kiss so much ass!. Why don't you join the party!

My pitbull ass eats beagles for breakfast
I
'll risk 3% to take 1% on you
My trades are 100% profitable 65% of the time!
  • #172
  • Jun 10, 2012 10:00pm Jun 10, 2012 10:00pm
Quoting jimmyjames79

It's a no brainer to let winners ride.
Evidently not if this thread is anything to go by, but that's classic coming from someone who advocates 1:1


Quoting jimmyjames79

I will open a demo account with a lopsided R:R. I will risk 2 % to gain 1%.

You open one up with your let winners ride and lets see who returns more in 6 months.

Risk has to be the same per trade. That's It. 2% risk per trade sound good.

I can trade any R:R and have similar results any which way. You seem to only have one skill. What was it. Oh yeah let winners ride.

This shall be entertaining for all the viewers of the never ending debate.
lol, trade demo for 6 months, are you serious?!?

I've got a better idea, rather than throw out ridiculous challenges why don't you just answer the questions that were asked? No, I didn't think so, it's easier to shift focus and blow smoke hoping no-one will notice.

Ok how about this for an idea, you trade demo for 6 months and assume that I take the opposite side of all your trades. Come back in 6 months and let's see where we are.

Yeah, right......
  • #173
  • Jun 10, 2012 10:03pm Jun 10, 2012 10:03pm
Quoting bluesteele

LOL...I like this..Give advice and then proceed to say dont take my advice...

Just sayin..


LOL, yeah didn't see that......


Quoting bluesteele

BTW my moneys on Mutts.
Good call!



Oh well, there goes the neighbourhood! All we need now is Slim with his witty repartee......
  • #174
  • Jun 10, 2012 10:08pm Jun 10, 2012 10:08pm
Quoting bluesteele
LOL...I like this..Give advice and then proceed to say dont take my advice...

Just sayin..



BTW my moneys on Mutts.
I fail to see the paradox.
When the Joker is in the deck.. fear not and play it well
  • #175
  • Jun 10, 2012 10:08pm Jun 10, 2012 10:08pm
Quoting dean
THe single biggest mistake anyone could make here is to take another persons advice on how to trade. NOt only are most here just faceless people you know nothing about, but they have no clue as to your trading personality and your pain tolerance amongst many other factors....if you or anyone else for that matter uses a method or system that you are comfortable with and makes your trading both profitable and stress free....who cares whether anyone else thinks you are limiting your potential.....its completely irrelevant....trading is about finding...
.. Zactly.. Markets open now. Time to switch off

My monies on the fact that this thread will never reach a conclusion. Because there is not one to reach. As with all threads. I just wanted to share my own thoughts, not get involved in pissing conests and defending my right to have an opinion.

Both ways work... It will depend on the market conditions at the time as to which wasy is IDEAL. But all traders are different and in these debates this is the most vital yet most ignored factor.

Trader:

Account size
Experience
Personality
Trade Style
Goals

Strategy:

Edge
M.O

If you can't make a profit with any combination of r:r then your money management is NOT THE PROBLEM. Just saying...

Good luck trading this week.
Time hides Nothing
  • #176
  • Jun 10, 2012 10:09pm Jun 10, 2012 10:09pm
Enter the trolls....
Time hides Nothing
  • #177
  • Jun 10, 2012 10:12pm Jun 10, 2012 10:12pm
Quoting bluesteele
LOL...I like this..Give advice and then proceed to say dont take my advice...

Just sayin..



BTW my moneys on Mutts.
Yes you are correct in a sense, my point is........ its dangerous to take advice directly regarding trading from poeple you simply have no clue about and vice versa.
  • #178
  • Jun 10, 2012 10:12pm Jun 10, 2012 10:12pm
Quoting jimmyjames79
..... ass eats beagles for breakfast
Don't mistake them. They're mostly bitches in heat that need a little petting
When the Joker is in the deck.. fear not and play it well
  • #179
  • Jun 10, 2012 10:13pm Jun 10, 2012 10:13pm
Quoting CindyXXXX
Enter the trolls....

There's one now !!
When the Joker is in the deck.. fear not and play it well
  • #180
  • Jun 10, 2012 10:19pm Jun 10, 2012 10:19pm
Quoting CindyXXXX
.. Zactly.. Markets open now. Time to switch off

My monies on the fact that this thread will never reach a conclusion. Because there is not one to reach. As with all threads. I just wanted to share my own thoughts, not get involved in pissing conests and defending my right to have an opinion.

Both ways work... It will depend on the market conditions at the time as to which wasy is IDEAL. But all traders are different and in these debates this is the most vital yet most ignored factor.

Trader:

Account size
Experience
Personality
Trade...
IT seems to me you have a good grasp on your own personality and the trading method required to fit. Good luck to you too.
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