NexusFi: Find Your Edge


Home Menu

 





Traders: Winning Ratio versus Risk/Reward


Discussion in Traders Hideout

Updated
      Top Posters
    1. looks_one baruchs with 3 posts (0 thanks)
    2. looks_two FulcrumTrader with 2 posts (0 thanks)
    3. looks_3 aquarian1 with 2 posts (1 thanks)
    4. looks_4 Big Mike with 1 posts (1 thanks)
      Best Posters
    1. looks_one omaha786 with 1 thanks per post
    2. looks_two nillz123 with 1 thanks per post
    3. looks_3 Big Mike with 1 thanks per post
    4. looks_4 tigertrader with 1 thanks per post
    1. trending_up 10,698 views
    2. thumb_up 5 thanks given
    3. group 6 followers
    1. forum 13 posts
    2. attach_file 0 attachments




 
Search this Thread

Traders: Winning Ratio versus Risk/Reward

  #11 (permalink)
 omaha786 
San Diego, California
 
Experience: Intermediate
Platform: Sierra Chart
Broker: IB, OEC, Optimus, DDT
Trading: ES, ZN
Posts: 221 since Jun 2010
Thanks Given: 512
Thanks Received: 158


aquarian1 View Post
Expected return #1 : $90 *0.7 - $150 *.3 = +$18
Expected return #2 : $310 *0.45 - $150 *0.55 = +$57

Two is better.

Profitability = expectancy x opportunities. If you can find 4 "trade 1", but only 1 "trade 2" during the day, then "trade 1" is more profitable.

Also, keep in mind, low win rate will incur possible large draw down. Hence to keep the risk of ruin the same, you have to bet small with "trade 2" than "trade 1". (reference: )

Visit my NexusFi Trade Journal Reply With Quote
Thanked by:

Can you help answer these questions
from other members on NexusFi?
Is there a way to simulate CONTINUOUS CONTRACT?
NinjaTrader
static margin on the right side of a chart
NinjaTrader
Can I use Ehlers Periodogram as the lookback for another …
NinjaTrader
Better Renko Gaps
The Elite Circle
Legends Trading: Ask Me Anything (AMA) w/Greg Khojikian CEO
Trading Reviews and Vendors
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
ApexTraderFunding.com experience and review
28 thanks
System Performance Stats Comparison
13 thanks
GFIs1 1 DAX trade per day journal
10 thanks
Spoo-nalysis ES e-mini futures S&P 500
8 thanks
Trading with Intuition
6 thanks
  #12 (permalink)
 
aquarian1's Avatar
 aquarian1 
Point Roberts, WA, USA
 
Experience: Advanced
Platform: IB and free NT
Broker: IB
Trading: ES
Posts: 4,034 since Dec 2010
Thanks Given: 1,509
Thanks Received: 2,593

And if trade 2 is 3 times more frequent than trade 1 then....
And if apples are oranges then...

This thread is about RR ratio versus W:L ratio.
A specific example was given.

No info on frequency is made and the only implication is even occurrence.
You could also extend your contrived example with contracts traded and pretend that you traded 3 times as many contracts on trade 1 as trade 2 and many other ways to try to make a silk purse of a sow's ear.

..........
peace, love and joy to you
.........
Visit my NexusFi Trade Journal Reply With Quote
  #13 (permalink)
 
GoldStandard's Avatar
 GoldStandard 
arizona
 
Experience: Intermediate
Platform: rolling my own
Trading: ES,CL,GC,6E
Posts: 205 since Oct 2009
Thanks Given: 324
Thanks Received: 191


You folks might find this equity curve widget useful for trying out various win rate & RR combinations.

Reply With Quote
  #14 (permalink)
 baruchs 
Israel
 
Experience: Intermediate
Platform: NinjaTrader
Broker: pfg
Trading: eminis
Posts: 323 since Jun 2009


Quoting 
You folks might find this [COLOR=#0000ff] equity curve widget[/COLOR] useful for trying out various win rate & RR combinations.

or you can download my RiskReward Calculator from NT6.5 indicators section

Reply With Quote




Last Updated on March 23, 2011


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts