Risk Reward Ratio.

Discussion in 'Technical Analysis' started by mengtrader, Jul 25, 2007.

  1. Hello,

    I calculate the R/W ratio for the initial entry for long position like this:
    (entry price- stop price)/(target price - entry price).

    My question to you is:
    If you add more shares for the same stock, how do you recalculate the R/W ratio? Do you treat them as a totally different position and calculate the ratio separately without considering the existing shares?

    Also do want to share any guideline on when to increase/reduce positions?

    Thanks a lot in advance!