Should risk be equal to reward?

This is a discussion on Should risk be equal to reward? within the General Trading Chat forums, part of the Reception category; What if they are 1:1 and those 1"1's yield 75% success rate? What if your 3:1's yield 25% success rate? ...

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Old Sep 16, 2010, 3:35pm   #16
 
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Re: Should risk be equal to reward?

What if they are 1:1 and those 1"1's yield 75% success rate?
What if your 3:1's yield 25% success rate?


Quote:
Originally Posted by OptionParty View Post
1:3 Risk:Reward is a safe place to start,
unless you like trading as a form of gambling.

Seek trading opportunities with 3 to 1, or pass them by.

Carl
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Old Sep 16, 2010, 4:18pm   #17
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Re: Should risk be equal to reward?

Quote:
Originally Posted by 4xpipcounter View Post
What if they are 1:1 and those 1"1's yield 75% success rate?
What if your 3:1's yield 25% success rate?
if it's a system then you could just backtest and see what's better anyway
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Old Sep 16, 2010, 11:44pm   #18
 
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Re: Should risk be equal to reward?

That is part of the reason I was adrressing the following comment, "1:3 Risk:Reward is a safe place to start, unless you like trading as a form of gambling.Seek trading opportunities with 3 to 1, or pass them by."
In other words, if your trading system, proves to be a winning system, what diffeence is there is it is 1:! R/R?
Also, there is hardly an indiactor that doesn't lag, so backtesting is not necessarily the answer. Forward testing on a demo is the best option. Of course, most people don't like that idea, because it takes time and work.




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if it's a system then you could just backtest and see what's better anyway
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