Thursday, November 16, 2006
You know friends, I am sick of people trying to insist that you need a specific risk to reward ratio to succeed in trading. If you are not familiar with Reward to risk ratio, then email me and I wil l explain. You need to look at the big picture: the big picture being you can have reward to risk ratio of 0.5 and still make money! How? Profit is a function of RR Ratio and accuracy. so If you have accuracy of 75% and reward to risk ratio is 0.5 YOU Will still make money. In simple terms, you are making 50 cents 3 out of 4 trades and losing $1 in 1 out of 4 trades. I hope that makes sense.