Risk:Reward question

Mr Fox

Established member
510 136
I'd risk infinite amount so long as my reason for entering the trade remains valid. Other times I'd stay in the trade out of spite of not letting the other side win. It would be incorrect to assume the market is a one way street.

Real trading is a game of skirmishes. Placing your bet casino style is gambling.

:clap:

With that approach we should re-name you Winner Joe from Beginner Joe.
:LOL:
 

OrderFlowDashPro

Member
76 9
Risk reward is only part of the equation. The other part is your probability of a winning trade. The amount you can risk per trade is a function of your win ratio and your willingness to take a certain loss. I can say that the 1%-2% often quoted is going to be very sub optimal if you have an edge. This 2% figure was based on a 50/50 win/loss ratio assuming the trade didn't have an edge. Risking the same amount on every trade doesn't seem to make sense to me, either -- if some trades are better then others.

I have noticed that I miss some trades, and examining this issue closely I have noticed that in the past I have not took these trades either, so I thought I would ask people on this thread their opinions.

Lets say you see a trade, and once appropriate due diligence is followed and all rules of your methodology are met the trade has a potential 1:1, and you risk 1% of your acc. on all trades.
Would you still take the trade if the risk:reward was 3pips risked for 3 pips gained, and still apply a 1% account allocation on such trades(assuming slippage, and spread are already taken into consideration).

I look forward to your response chaps.

Best
John
 

Solas0077

Active member
236 14
Would you still take the trade if the risk:reward was 3pips risked for 3 pips gained, and still apply a 1% account allocation on such trades(assuming slippage, and spread are already taken into consideration).

3 pips is noise or even worse than noise. What about 100 pips with 0.5% of capital allocated and 3:1 reward:risk? To me this sounds better. I tried what you are trying long time ago and lost everything after a news release when the market gaped against me. If you still want to try you will also learn the hard way. Nobody escapes at the end.
 

Mr Fox

Established member
510 136
Risk reward is only part of the equation. The other part is your probability of a winning trade. The amount you can risk per trade is a function of your win ratio and your willingness to take a certain loss. I can say that the 1%-2% often quoted is going to be very sub optimal if you have an edge. This 2% figure was based on a 50/50 win/loss ratio assuming the trade didn't have an edge. Risking the same amount on every trade doesn't seem to make sense to me, either -- if some trades are better then others.

The 1-2% risked per trade is not sub-optimal, but more a subjective percentage that adheres to a persons risk appetite. I would not risk more than 1% on a trade, yet I would not argue the toss with someone who is prepared to risk 5%, nor would I say they were wrong.

Yes I was using broad strokes, and generalising, and that's why I stated if all your other parameters had been met(rules of your methodology/edge) but the core of the question remained the same which was would you risk 3 pips, to gain 3 pips.

Just as an aside, may I ask how you(personally) work out the other part of the equation(probability of your trades).

Best
John
 

Mr Fox

Established member
510 136
3 pips is noise or even worse than noise. What about 100 pips with 0.5% of capital allocated and 3:1 reward:risk? To me this sounds better. I tried what you are trying long time ago and lost everything after a news release when the market gaped against me. If you still want to try you will also learn the hard way. Nobody escapes at the end.

Hi Solas,

Thanks for your reply, and no I would not like to learn the hard way, but rather listen to you, who has been there, done it, and learnt the hard way.
:)

Best
John.
 

BeginnerJoe

Senior member
3,329 350
Hi Solas,

Thanks for your reply, and no I would not like to learn the hard way, but rather listen to you, who has been there, done it, and learnt the hard way.
:)

Best
John.

Learning without paying defies the laws of nature. If you don't want to pay you will never learn anything worth something. Free lunches are for loosers. Winners pay for what they eat. You have a long road ahead of you since you are not even starting at the right place. The right place is the booth where you buy the entrance fee to the market ATM machine.
 

Mr Fox

Established member
510 136
Learning without paying defies the laws of nature. If you don't want to pay you will never learn anything worth something. Free lunches are for loosers. Winners pay for what they eat.

Let's hope you haven't learnt a lesson by paying with your @ss then.
:LOL:
 

Triggerfish

Active member
229 14
Learning without paying defies the laws of nature. If you don't want to pay you will never learn anything worth something.
So are you suggesting that those who teach people to trade in the region of £5,000 a head is "worth something"?

Learning is only based on a false perception in the "mind".....trapped in their own belief......"limitation"
 

BeginnerJoe

Senior member
3,329 350
So are you suggesting that those who teach people to trade in the region of £5,000 a head is "worth something"?

Indeed it does. How else will people learn those don't worth anything ? That knowledge is worth something. What is obvious to you may not be obvious to others. Best they pay for a lesson and learn what you know or what you learned.
 

Mr Fox

Established member
510 136
Indeed it does. How else will people learn those don't worth anything ? That knowledge is worth something. What is obvious to you may not be obvious to others. Best they pay for a lesson and learn what you know or what you learned.

What an idiotic post. You would think that someone who has been a member of this site for over 2 years would have something constructive to add, rather than leading people down a path that will cost them time, and more importantly money on their road to becoming successful traders.

Or am I right in assuming that, obviously you have been one of those people who paid for a course that didn't teach you much, and instead of warning people of the pitfalls, you have become bitter, and want people to fall where you fell.

If that is the case then that is a poor show old boy.

P.S. Alas it has taught me(and others) a lesson(for free), and that is never to take heed of your advice.
 
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Triggerfish

Active member
229 14
Indeed it does. How else will people learn those don't worth anything ? That knowledge is worth something. What is obvious to you may not be obvious to others. Best they pay for a lesson and learn what you know or what you learned.
The knowledge maybe "worth something" but is that something all that is required or rather guarantee one to become I guess.....successful after the teaching?.....yet how do we "know" that to be true for both the teacher and the teaching itself?

So you are also suggesting that there is no learning of anything without £/$...?.....one cannot learn for FREE?
 

BeginnerJoe

Senior member
3,329 350
The knowledge maybe "worth something" but is that something all that is required or rather guarantee one to become I guess.....successful after the teaching?.....yet how do we "know" that to be true for both the teacher and the teaching itself?

So you are also suggesting that there is no learning of anything without £/$...?.....one cannot learn for FREE?

Anything of value cannot be learned for free. But that doesn't mean you have to pay someone else to learn from them. You can pay for material and do DIY learning. So long as you have paid for the value, then you have gained that value. This is the basic law of nature.

The OP does not want to pay to learn from someone, and he does not want to pay for the material to learn by himself. Instead he expects me to give him something of value all because I have been a forum member for two years. Can you not see this is a no hope situation ?
 

BeginnerJoe

Senior member
3,329 350
Or am I right in assuming that, obviously you have been one of those people who paid for a course that didn't teach you much, and instead of warning people of the pitfalls, you have become bitter, and want people to fall where you fell.

I have never paid for a course. I am more of a DIY kinda guy. I even fix my own car and build my own computer, be my own plumber, be my own gas boiler man, etc, etc.
 

Mr Fox

Established member
510 136
Anything of value cannot be learned for free. But that doesn't mean you have to pay someone else to learn from them. You can pay for material and do DIY learning. So long as you have paid for the value, then you have gained that value. This is the basic law of nature.

The OP does not want to pay to learn from someone, and he does not want to pay for the material to learn by himself. Instead he expects me to give him something of value all because I have been a forum member for two years. Can you not see this is a no hope situation ?

My dear fellow all I asked was a simple question of risking3 pips to gain 3 pips, yet you sound like a desperate vendor trying to sell a course, and with your idiotic posts even if you had something of worth to sell I would politely decline.
:LOL:

The last time I checked this was a "free public forum", and not a pay as you ask a question site.
 

BeginnerJoe

Senior member
3,329 350
My dear fellow all I asked was a simple question of risking3 pips to gain 3 pips, yet you sound like a desperate vendor trying to sell a course, and with your idiotic posts even if you had something of worth to sell I would politely decline.
:LOL:

The last time I checked this was a "free public forum", and not a pay as you ask a question site.

Well, anyone having even the most basic appreciation of trading will know trading for 3 pip profit is suicidal. So your question didn't even qualify as the newbest question. So I am not surprised nobody is bothering. It's like trying to teach a 3 year old the theory of relativity. It would be a pointless exercise.

If you really want to know what 3 pips can get you, why not put your money in the market and see for yourself ?

I have no idea since when I have been trying to sell something. I always thought I was here for teh lulz, and nothing but teh lulz.
 
 
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