Taking profits and drawdown

Mr Woozel · May 18, 2012

Hello,

I look for risk:reward of 1:5 or better and am looking at various ways to manage trades to limit drawdown but still have a reasonable chance of achieving say 1:10.

For instance, once a trade gets to 1:5, the original risk:reward of 1:10 now becomes 1:1 if stop loss at breakeven. Also with three trades open, each risking 0.5%, this means a possible drawdown of 9% (if stop losses not moved) once the trades are at 1:5 ?

Interested in what other people do or any ideas on this.

Thanks.

tomorton · May 18, 2012

I dream of 1:10, that would be a rare achievement for swing trades on the dailies.

How often do you achieve 1:5 (and what's your trading timeframe)?

Mr Woozel · May 18, 2012

tomorton said:
I dream of 1:10, that would be a rare achievement for swing trades on the dailies.

How often do you achieve 1:5 (and what's your trading timeframe)?

Hi.

Have had 7 trades this month with 1:5 or better. One is currently open (at 1:11 at the moment) but has profit locked in. Will tally up at the end of each month or quarter. Average initial stop loss is 30 pips and had alot of small loses.

Mainly daily timeframes.

Think I must be running hot at the moment!

Mr Woozel · May 18, 2012

I assume any loss in unrealised profit is considered a drawdown?

So if account balance is £600 and unrealised profit is £60, then if stop losses are hit at the entry price, this is considered a 10% drawdown?

NVP · May 18, 2012

Mr Woozel said:
Hello,

I look for risk:reward of 1:5 or better and am looking at various ways to manage trades to limit drawdown but still have a reasonable chance of achieving say 1:10.

For instance, once a trade gets to 1:5, the original risk:reward of 1:10 now becomes 1:2 if stop loss at breakeven. Also with three trades open, each risking 0.5%, this means a possible drawdown of 9% (if stop losses not moved) once the trades are at 1:5 ?

Interested in what other people do or any ideas on this.

Thanks.

hey dude

how do you calculate the probability of a 5:1 risk reward on an individual trade then ?

N

Mr Woozel · May 18, 2012

NVP said:
hey dude

how do you calculate the probability of a 5:1 risk reward on an individual trade then ?

N

Hi.

I just know that to break even (assuming static stop losses and no spread or commissions) my win rate needs to be 17% for a risk:reward of 1:5. I am confident of at least a 22% win rate.

Taking profits and drawdown

Mr Woozel

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tomorton

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Mr Woozel

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Mr Woozel

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NVP

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Mr Woozel

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