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immy wrote:A Quick 40 pipper on DAx, sorry guys I wanted all of you to get in on it and before I could type "this level is worth trying. it triggered and went up like a rocket. I took profits at the peak as it went 40 pips that is 4 times of my risk, its more than probabilistically enough. Note, I did not say, its more than enough. Rather probability wise a gain like this within such a short period doe not happen often so best to take it. I know there will always be these odd few where you'd take profit 1:5 and next moment you'll repent over it as you could have taken 1:10. but you gotta stay GRATEFUL at those times haha .
ps: Although I wrote modestly 1:4 but if you check the picture carefully my SL was set at 6 pips as I don't like to give back to much. My thought process was, if it breaks out in style, as in break violently like it did then fine but if just kicks me in, stops and starts pulling back I'll get out quick. So actual Risk Reward should be 6:40 i.e. 1:6.6
Further to above, it was Dax's day today.
This Slide is VERY IMPORTANT
The Chat session.
Oh Hello US News during NEW YORK Session
Took 15 pips ... thank you thank you ... but should really have gone for TZ1... as usual. that would have been 25 pips more...
Immy,is there a post somewhere explaining these ratios(1:1) you all speak of, not that I ever have a winning trade to consider,I'm just curious??
kooky
Very simple, Kooky.
If your SL is 1 pip and you take 2 pips, that's a 2:1 win.
If your SL is 5 pips and you take 10 pips, that's a 2:1 win.
If your SL is 5 pips and you take 15 pips, that's a 3:1 win.
If your SL is 8 pips and you take 12 pips, that's 1.5:1 win.
Just remember it's your initial SL that counts, not where you may trail it to.
Simples :-bd
kooky wrote:Immy,is there a post somewhere explaining these ratios(1:1) you all speak of, not that I ever have a winning trade to consider,I'm just curious??
kooky
Thanks Dave for your Answer
Know your Risk: The Risk-Reward Ratio
Risk is a part of trading. Every trade carries a certain level of risk. Every trader must know the amount of risk that is being assumed on each trade. Knowing the amount of risk on each trade is one way to limit it and to protect your trading account. The best way to know your risk is to determine the risk-reward ratio. It is one of the most effective risk management tools used in trading.
The risk-reward ratio is a parameter that helps a trader to determine the level of risk in a trade. It shows how much a trader is risking versus the potential reward (or profit) on a trade. While this may seem simplistic, many traders neglect taking this step and often find that their losses are very large.
How to Determine the Risk-Reward Ratio?
The first step is to determine the amount of risk. This can be determined by the amount of money needed to enter the trade. The cost of the currency multiplied times the number of lots will help the trader to know how much money is actually at risk in the trade. The first number in the ratio is the amount of risk in the trade.
The reward is the gain in the currency price that the trader is hoping to earn from the currency price movement. This gain multiplied times the number of lots traded is the potential reward. The second number in the ratio is the potential reward (or profit) of the trade.
Examples
Here are a few examples of the risk-reward ratio:
If the risk is $200 or 20 pips and the reward is $400 or 40 pips, then the risk-reward ratio is 200:400 or 1:2.
If the risk is $500 or 5 pips and the reward it $1,500 or 15 pips , then the risk-reward ratio is 500:1500 or 1:3.
If the risk is $1,000 or 100 pips and the reward is $500 500 pips , then the risk-reward ratio is 1000:500 or 2:1.
What is a Good Risk-Reward Ratio?
The minimum risk-reward ratio for a Forex trade is 1:2. However, a larger ratio is better. An acceptable risk-reward ratio for beginning traders is 1:3. Any number below 1:3 is too risky so the trade should be avoided. Never enter a trade in which the risk-reward ratio is 1:1 or the risk outweighs the reward.
Many experienced trader will only enter trades in which the risk-reward ratio is 1:5 or higher. This requires that the trader wait for a trade with this ratio, but the reward is worth it. A higher risk-reward ratio is a good idea in case the currency does not make the anticipated price movement. However, if the trader uses a lower risk-reward ratio, there is very little room for smaller price movements and the amount of risk will increase.
The risk-reward ratio is an important risk management and trading tool. It is important for beginning traders to take the extra time to perform this task because it can help to minimize risk in every trade. Waiting for the right risk-reward ratio can take a long time. However, the benefits of waiting for a higher risk-reward ratio are worth the effort and patience. You will know your risk and know your potential profit. Most importantly, you will know whether the trade is worthy of your money.
Hi everyone. I have been gone for a long time as I never got the hang of trading the M1/M5 charts successfully. I am now back but trading only the M60 charts. As before, it is difficult to find all the latest indicators in one place. I also cannot find the password for the chat room. Can someone please provide a list of latest indicators and password for chat room?
Thank you. I must have looked at that page 5 times. Finially saw it. Guess my eyes are really getting bad.
Anyway, I previously discovered trading the M1/M5 timeframe is not for me. My interest in AIMS has recently been rekindled, but on the H1 timeframe.
