some time I see risk reward ratio like 1:1 , 1:2 1:3 etc. is it true no it is not as simple as 1+1=2. look what grate fti says about it.
"Hi ALL,
before we go on, I think I should mention this.
A long time ago.
Mr. Welles Wilder taught me this.
This is not new.It was old when the Phoenicians were trading with the Romans and the Greek
Philosophers cornered the olive oil market. This is the concept.
The percentage gain it takes to recover a loss increases geomatrically with losses.
The concept is as the following table
% Loss intial capital % profit required to Recover
5------------------------5.3
10----------------------11.1
15----------------------17.6
20-----------------------25
25----------------------33.3
30----------------------42.9
35----------------------53.8
40----------------------66.7
45----------------------81.8
50----------------------100
55----------------------122
60----------------------150
65----------------------186
70----------------------233
75----------------------300
80----------------------400
85----------------------567
90----------------------900
The % gain required to to come back to balance (break even) will increase gemetrically with
your losses.
if you loss 20% of your capital. you will have to make 25% to come back to breakeven.
However if you lose 50% of your capital, you have to make 100% to come back to break
even.
So please be careful with your trading".
"Hi ALL,
before we go on, I think I should mention this.
A long time ago.
Mr. Welles Wilder taught me this.
This is not new.It was old when the Phoenicians were trading with the Romans and the Greek
Philosophers cornered the olive oil market. This is the concept.
The percentage gain it takes to recover a loss increases geomatrically with losses.
The concept is as the following table
% Loss intial capital % profit required to Recover
5------------------------5.3
10----------------------11.1
15----------------------17.6
20-----------------------25
25----------------------33.3
30----------------------42.9
35----------------------53.8
40----------------------66.7
45----------------------81.8
50----------------------100
55----------------------122
60----------------------150
65----------------------186
70----------------------233
75----------------------300
80----------------------400
85----------------------567
90----------------------900
The % gain required to to come back to balance (break even) will increase gemetrically with
your losses.
if you loss 20% of your capital. you will have to make 25% to come back to breakeven.
However if you lose 50% of your capital, you have to make 100% to come back to break
even.
So please be careful with your trading".
don't predict direction, but dance with flow of water
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