Risk vs Reward
I am not much experienced in trading. But one of the many things that I have learnt from trading is that Risk is predetermined in trading. But your reward is always unpredictable. So whenever you enter a trade know your pain threshold. Even a professional trader knows the market to some extent. No one is certain about outcome of a trade. So always be ready for the pain.
You are correct. But there are some other cases. For example your trading style may support high risk tradings becuase high risk always yeilds high returns as well as high losses. So it depends on how you trade and your trading volume. With low volume you may not want to trade at low leverage. Leverage should be choosen with care.
Stick to your rules
Risk management is the most important pillar of trading, It's absolutely right anyway: we can never know the outcome of a trade, as well as every trade is independent and unique.
Between, we are pressing a point which is related to money management. Personally I NEVER enter a position with an R:R ratio under 1:1.
Keep it simple stupid
when someone ask me what is the holy gril in trading then i will reply in seconds without hisitation that money mangment is the holy gril in trading any system you follow but money mangment is the basic point and in money mangment the risk reward ratio is the first thing .....i take 1:2 to 1:4 risk reward in my trading
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1:4 is very good ratio.....but it could make your account suffered when you use MM compound.
I guess Risk Reward ratio is also good indicator for us to measure how good we trade....don't be too happy when we can make high gain but also high DrawDown,,,,it can make our account MC easily.
Originally posted by widhie751:4 is very good ratio.....but it could make your account suffered when you use MM compound.
I guess Risk Reward ratio is also good indicator for us to measure how good we trade....don't be too happy when we can make high gain but also high DrawDown,,,,it can make our account MC easily.
MC mean? i cant get the point that you mention
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mc is margin call. the risk we take in forex is usually less than the resuklt we get and its not encouraging most times
Jesus is Lord
thank you for ur correction
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Yes actually MC is the situation where all floating order closed automatically because equity is drop into near zero.....
and we as trader we dont want this situation.......
and if our trade risk/drawingdown is high,,,, so probability to get MC/bangkrupt is also high.....
High risk without hihg reward is not worth taking. imagine risking 10pips for two pips. i rather risk 10pips for 100pips
Jesus is Lord
Originally posted by janknoah1High risk without hihg reward is not worth taking. imagine risking 10pips for two pips. i rather risk 10pips for 100pips
this type of trades are called swing and all those who dont follow this type of risk reward they are in average loss in the end of the month in my view.
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