Risk Reward Ratio

Discussion in 'Strategy Building' started by Huskeez, Jul 4, 2013.

  1. Huskeez

    Huskeez

    Hey guys,

    Quick newbie question, how do I adjust my risk reward ratio once my "STOP" is now above my "ENTRY"

    Entry = $3.32
    Stop = $3.30
    Target = $3.60
    Risk/Reward = 14:1

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    Now when ever I move my stop above the $3.32 mark my R:R turns negative ?

    Cheers guys
     
  2. NoDoji

    NoDoji

    Risk:reward is only part of the equation for trading success. Win rate is the other core part. And, finally, sample size lets you know how many consecutive trades are needed on average to realize the positive expectancy indicated by the win rate/R:R combo.

    If you want to have a flexible trade management system instead of fixed stop/target, it adds a lot of complexity to the analysis process.