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Stick to whatever works for you and try to improve
Ignore all that "go only for 1/10 R", that's all unrealistic nonsense
Trading on low R/R depends highly on setup/win percentage. And yes, there are setups with low R/R but high success rates. Downside is that small change in market conditions on your personal performance will kill profitability
It's always better to skew R/R a bit if you can and in most cases you actually can do it by simply watching the market conditions and when your setup works better, either to get more from it or to simply avoid trading in unfavorable conditions
I can appreciate your skepticism though it sounds like he may be a "professional DOM trader from Chicago" who possesses skills that I (and a lot of other chart-only traders I presume) simply don't have. I've tried using order flow techniques over the years (Jigsaw, etc.) but it hasn't clicked yet for me well enough though I DO see some of the patterns they mention so figure it may be simply a matter of more screen time. Still, I would rather rely 100% on automation and trying to program order-flow changes in velocity/acceleration/volume that produce consistent results is taking me more time than I care to admit (but I've at least learned a LOT along the way). Over the past 10+ years, I've never be reliable enough discretionary trading (even though I've had my share of 100% winner/$2K++ days) so will stick with the automation route.
It's right up there with being a master of machine learning and other areas that take a LONG time to make any headway with and of course, NOBODY will ever simply give someone a "grail system" anyway. Those who do put in effort to learn ML, DOM, etc. are justifiably rewarded in the end.
1) What made you choose 4 ticks, especially when the ATR is 10? If you try to make the market fit your specs, you will be disappointed. You can't make a 90 degree day cool down by wearing a jacket.
2) some of the best traders are wrong 40% of the time. Commissions and expenses would make them losers as well if they couldn't optimize winners and minimize losers. Let's say hypothetically you are 50/50 right/wrong in your market calls. If you were to set your profit targets to TWICE what your stop loss was, in theory you could be right 33% of the time and break even (before costs of course). Obviously it's harder when you need a 20 tick move to be right and only a 10 tick move to be wrong, but you get the idea that it's better to make $10 for every winner and lose $5 for every loser.
3) If you can afford it, trade a 2 lot instead of 1. Use your existing strategy for 1 of them and use NO PROFIT TARGET for the other one, and only a trailing stop. In theory, you could make 200 ticks on a trade if the market never comes off by 2.5 handles.
4) Plan the trade, and then trade the plan. Don't ad-lib based on a feeling. If you have a decent strategy and good position management you will win. If you fall in love with a losing trade because "you think it's going higher", you'll have a handful of trades that give back what dozens of winners have made.
5) Stay within yourself and don't increase your size until WELL AFTER YOU CAN AFFORD TO or read the last clause in #4
if you have a algo running , with a degree in computer science ya it could be done. he is not looking at a dome all day doing 100 round turns with out an auto execution and management algo. if he could do what he claims , he would be trading for Goldman .
A high risk reward ratio is a desirable as a function of probabilities. For example, lets say you are right about the market 70% of the time , and the risk reward ratio on each trade is 1:1. Thus, out of ten trades seven trades were closed with a profit of $1, while three were closed with a $1 loss The bottom line is you walk away with $4 .
If the ratio is increased to 3:1 and there is a decrease in the probability of winning trades from 70% to 40%. With the 3:1 ratio, for the same $1 profit , 4 winning trades would net $12, subtract the losing trades $6 , profit would be $6.
By decreasing the probability of winning from 70% to 40% while increasing the risk -reward ratio you increase profitability by 50%
The risk on a single trade should never exceed 1 % to 3% of the total portfolio. The bottom line , is the ability to have a small risk on any trade relative to your total capital so you can stay the distance . For the first year of trading if you can break even you are doing well.
1- Use Micro
2- If your TP is that much small in current volatile period then i would say dont put SL, wait for reversal signals and have TP only.
With current volatilyt you will end up with so many SL and so many trades that commision will eat up everything. Trade less.
Go to Trading Mission and stick with them and keep going. You will never look back and with your
Full account my very rough guess is you will make 2k-3k /mo. Reinvest it all and in 2 years you will be living the dream.
With the increased volatility in the market lately, you have to adjust stop losses. A good tool to use is ATR (Average True Range). Your stop should be at least 1 ATR. That will mean adjusting position to keep your risk the same.
Persistence! Nothing in the world can take the place of persistence.
Talent will not ... nothing is more common than unsuccessful men with talent.
Genius will not ... Unrewarded genius is almost a proverb.
Education will not ... The world is full of educated derelicts.
Persistence and determination alone are omnipotent! Calvin Coolidge
