What are realistic Risk:Reward ratios for ES/NQ, assuming we want a Reward > Risk system. Is it possible still to get higher than 1:3 Risk:Reward trades with any kind of frequency nowadays? (say 5 or so in a month) Is 1:4 realistic? 1 NQ pt loss vs 4 NQ pt gain...hmmm.
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Most successful traders I know don't use risk:reward ratios. However, they are heavy into money management, risk control and/or positions size management. NihabaAshi
Remiraz, To answer your question NQ Futures Yes 1:3 is possible, Usually for me its around 1.5 Stop , 4.5 Reward .5 For slippage, so 2 points Stop, 4.5+ Reward If It doesn't have this type of reward, such as 1 point away from a pivot point, I won't trade it.
The slippage/spread/comms really act like the House Edge doesn't it? 1.5 to 4.5 is 1:3. But adding spread/slippage/comms it becomes 2 to 4.5 or 1:2.25.
Pretty much, Either you SCALP where your risk is tick for tick Or you expand your risk reward so it pays for the commissions, In the futures trading , Just entering a trade, you've just lost $50 with a 1.5 point stop ( 3 ticks). As they say futures trading is a losers game NEGATIVE sum.