Hi guys,
I'm thinking about an idea.. When you trade with 1:1 risk reward ratio, your stop loss and take profit level are equal. If you trade without any edge, your winning percentage would be about 50%, so you are at zero. This is the worse case (if your mental capital and money management are correct).
So if you find a solid edge, you can make money in the long run.
What is your opinion? I think this way of trading is pretty safe even if you don't have too much edge.
Of course you have to pay the spread, but on higher timeframes the spread are almost negligible.
Brian
I'm thinking about an idea.. When you trade with 1:1 risk reward ratio, your stop loss and take profit level are equal. If you trade without any edge, your winning percentage would be about 50%, so you are at zero. This is the worse case (if your mental capital and money management are correct).
So if you find a solid edge, you can make money in the long run.
What is your opinion? I think this way of trading is pretty safe even if you don't have too much edge.
Of course you have to pay the spread, but on higher timeframes the spread are almost negligible.
Brian