Trading through VPS, any experience? 68 replies
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DislikedI use 1:2 for risk:rewards, what you guys use? I find it quite useful for my trading experience.Ignored
DislikedThe idea that having a r:r of X will give you any kind of edge is the most misunderstood concept in any trading book or forum. Which trader makes money?Trader A risks 10 pips to make 20 pips and he wins 25% of his trades.Trader B risks 20 pips to win 10 and he wins 80% of his trades.Ignored
DislikedAlot of people don't figure in recovery too. Technically if you use % based risk and reward based on account size your account will naturally decrease with 1:1 @ 50%. For example: 100$ lose 50% = 50$ win then win 50% = 75$ 1:1 risk:reward at 50% win rate 2 trades here it is in reverse 100$ win 50% = 150$ then lose 50% = 75$ 1:1 risk:reward at 50% win rate 2 trades what this means is that if you use % of account based position sizing your account will have the tendency to drift towards 0 while if you use fix risk with plateaus you will have more...Ignored
I will not be basing risk or SL on percentages though. If you lose 5% on a trade, then immediately follow it up with a 5% gain, you will not have broken even over the two trades. I don't like this.
My idea to keep things simple is to use a level based system, such as the following...
Account value $1000-$1999 = max risk $50.
Account value $2000-$2999 = max risk $100.
Account value $3000-$3999 = max risk $150.
I will use the technicals to tell me where my stop should be on the chart, then use a calculator to determine lot/order size based off the $50/$100/$150/ect risk.