Risk to Reward - Negative, Positive or Neutral ?

Discussion in 'Index Futures' started by Razor, Dec 26, 2006.

  1. Razor


    Hi all,

    This question / poll goes out to futures traders. I have always been curious as to how successful intraday futures traders plan a trade as far as risk to reward us concerned.

    I myself am at the breakeven / looking for consistency stage in my trading. I tend to look for 2/1 r/r (so if stop is 1 point on the ER2 I look for 2 point gain but I go to breakeven after the trade has gone +1 or 1/1 r/r. So yes I am willing to take a breakeven trade even if trade was up 1.9 points. The reason for this is that I know if I can do 2 - 4 trades a day, hit 33% win (+2 points), 33% (breakeven), 34% loss (-1 points) that I can do well. I am still working on my edge and working at achieving the previous ratio; however, I look at it this way. If I flipped a coin and entered a trade in theory 50% of the time it would go +1 in my favour and 50% of the time it would go -1 not in my favour. So in theory my number of stops at -1 should be similar to my breakeven trades (because I go to breakeven after hitting +1). Now I have to rely on my edge to give me the 33% wins at +2 to show me profits over time.

    So 'in theory' the goal is, 3 trades per day avg. 20 trading days per month = 60 trades per month:

    20 wins X 2 = 40 points
    20 breakevens = 0
    20 loses x 1 = 20 points

    so a Net of 20 points per month less commish

    Like I said I am still developing my edge to get me to the above ratio but it is coming :)

    So can successful futures trades post their style, thank you:

    1) ER2, ES, NQ or YM ?
    2) Avg. trades per day and month
    3) Profit goal and risk per trade (on avg.)
    4) Avg. number of wins per month (percentage wise)
    5) Avg. number of breakevens per month (% wise) , if you take breakevens
    6) Avg. number of loses per month (% wise)


    1) ER2 & ES
    2) 2 - 3 day, 40 - 60 per month (70% on ER2, balance on ES)
    3) +2 profit goal on ER2 with a stop at -1, (ES, about 2.5 and -1.25)
    4) 25%
    5) 35%
    6) 40%

    Cheers :D
  2. Razor


    BTTT :D
  3. Razor


    Thought this would bring some nice discussion ? Does the lack of response mean no one knows really how they take profits and stops or everyone holding cards close to their chest ? :D