dropping a bomb

Discussion in 'Risk Management' started by sporky, Aug 11, 2007.

  1. sporky


    in retrospect I thought this is the best forum for this thread...

    let me go ahead and put it out there, risk/reward ratios are a fallacy. yes? no?

    since i'm new around here I probably should say I've been trading futures over a period of almost 20 years. i've made and lost my fair share. so I am not a newbie.

    many say don't take a trade with less than 3:1 and certainly not less than 2:1. whatever...pick your own numbers.

    now, a basic tenet for any trader should be "anything can happen" (and it usually does, lol). if that's the case how can one realistically measure risk/reward?

    as a day trader, the way i've been doing it is with support/resistance and fib levels. but again, anything can happen and usually does. so, I often think i'm kidding myself when measuring risk/reward.

    in other words, we can know what we are willing to risk, but there is no way to really know what the potential reward is since ANYTHING CAN HAPPEN.

    what say u?
  2. if you've been trading for 20 years

    and are still asking question,

    you are hopeless , I know I am harsh but think about it

    if you are lying then its OK
  3. sporky


    then again you have not addressed the fact, ANYTHING CAN HAPPEN.

    or you simply misunderstood my post. ;)
  4. ken__0


    what say I......
    congrats sparky for 20 years
    support / resistance and fib levels your a real genuis I see.
    anything can happen and often does
    Are you worried, do you find yourself often hedging your trades.

    But if all else fails drowned yourself in kool-aid

    What say u
  5. sporky


  6. selecto

    selecto Guest

    sporky, don't let it get to you. Many of the posters on this board do so from their parents' basements.
  7. Babak


    right. it is an estimate or a throw of the dice of sorts.

    just like taking any trade.

    but if you have an edge, over time repeated several thousand times, the outcome is in your favor.
  8. sporky


    yeah...I guess what i'm wondering is if measuring risk/reward is as much a part of your edge as your system.

    it's just that people talk about risk/reward as if it really is quantifiable. risk is, but not reward cuz we don't know the future.
  9. risk/reward is an illusion sold by the trading guru's who cant trade. Expectancy is everything.
  10. sporky


    it would be nice if you expanded on that a bit.
    #10     Aug 11, 2007