R/R and % Win tradeoffs

Discussion in 'Risk Management' started by kidPWRtrader, Jul 29, 2010.

  1. If your gain is defined as

    T = To+Tm

    where To is the original and Tm the marginal

    and the loss is defined as

    L = Lo + Lm

    when LO is the original loss and Lm the marginal, then

    T/L = (To+Tm)/(Lo+Lm) ~ Avg win/avg loss

    from (To+Tm)/(Lo+Lm) you can solve for Tm/Lm provided you know the value of the ratio. One equation, three unknowns here, Tm, Lm and T/L
     
    #11     Jul 31, 2010