What do YOU consider acceptable Risk vs Return?

Thats right. Thats why I asked for YOUR opinion.

 

fwiw, i think most people critical of buy and hold (disclaimer: i have an account that i dedicate solely to buy and hold stuff - usually a minimum of 3 months and a maximum of years timeframe) fail to take into account the power of dollar cost averaging in regards to smoothing an equity curve.

buy and hold would have SUCKED if you put in all yer money in 1929 at the top and held. it was not at all bad if you were DCA'ing up to, through, and after the crash.

i've seen the #'s crunched

 

I should have clarified my original post - whats the maximum drawdown (risk) you'd incur for x % gain?


In other words, whats your uncle point?

And what probable gains - in your own mind - would justify the use of that strategy as it nears the uncle point?


For example, in the case of R:R 1:3. Would traders still consider a max 40% drawdown acceptable for a quite possible 120% gain?


Or is 20% max dd for a 60% possible easier to stomach?


I think most traders understandably fall within that 15-30% max dd zone.


This conversation was just intended as idle chit chat. Nothing weighty.

 

1%
unless I get gapped.

 

heh.

 

i like to risk 1.25 - 1.50 per share on any given trade.

...maybe thats a bit much?

- nate

 

I trade options only. Most of my plays have a 68%-75% chance of success. Most of the time the risk:reward is 4:1, although adjustments are used so that full 4 is never all lost. When conditions are optimal, the r:r can be closer to 1.5:1 with a 75%-85% success rate(admitedly those are tough conditions to find).