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searching for a strategy with RR 1:5

  • #1
  • First Post: Mar 18, 2018 12:51pm Mar 18, 2018 12:51pm
hi, i searching strategy with risk reward 1:5 (or more). i using many indicators, but isnt easy to find this setup.

ideally is: 1 trade profit, and 5-6 trades will get stoploss.

thankyou!
  • #2
  • Mar 18, 2018 1:27pm Mar 18, 2018 1:27pm
RR is determined by exit, not setup/indicators. For example, setting TP=100 pips, SL=20 pips will always give you 5:1R regardless of what entries you choose.
  • #3
  • Mar 19, 2018 3:24am Mar 19, 2018 3:24am
I've never heard of a strategy that allows 1:5 r:r off a single trade set-up using TA, though you cor SL/TP as suggested by hanover. Obviously though, that limits your return in money terms, unless you use a very large position size - but that brings its own problems, which a low r:r.

But you can increase r:r without taking on additional risk by repeatedly pyramiding your initial trade. Keep all trades open but move all SL's to the same price, a distance back from your last entry equivalent to your original TA-based SL from your initial trade. Hard to explain in theory but simple with an example if you would like me to do that.
  • #4
  • Mar 19, 2018 6:26am Mar 19, 2018 6:26am
Quoting foxerr
hi, i searching strategy with risk reward 1:5 (or more). i using many indicators, but isnt easy to find this setup. ideally is: 1 trade profit, and 5-6 trades will get stoploss. thankyou!
Flip a coin, and set your SL to ATR(20). Report back how you go, you'll be surprised.
  • #5
  • Edited 1:49pm Mar 19, 2018 1:07pm | Edited 1:49pm
Quoting foxerr
hi, i searching strategy with risk reward 1:5 (or more). i using many indicators, but isnt easy to find this setup. ideally is: 1 trade profit, and 5-6 trades will get stoploss. thankyou!
Hi foxerr,
Any strategy, including random coin toss, can be a 1:5 R:R method if you simply set TP=5xSL.
The clever bit is not that, it's finding a method where the success rate is better than 17%, i.e. better than the breakeven condition of 5 losers for every 1 winner.

In practice, you need to look for an entry that will explode away if you are right, or just get immediately stopped out if you are wrong for a very small loss. If you think about it, that means a method that very precisely picks a top or bottom so you can have a very tight stop. I can offer you two simple pattern based ideas that can potentially fulfill this:
1. breakout from a very well established range: enter at the breakout point with a very tight stop back inside the range
2. a double top/bottom: enter just below/above the double top/bottom with a very tight stop just past the extreme.
In both cases, if you are right, the trade can explode away on either a breakout or a reversal and you could realistically achieve 1:5 R:R

BUT, now the bad news: this rarely happens. Most of the time you will be stopped out because you do not get an explosive move and you don't have the room for the trade to hardly breathe because of the necessary tight stop. This is the inherent rub in what you are trying to do: you need a tight stop to be able to realistically achieve a winner 5x as big, but the tight stop makes a loss very hard to avoid. So your success rate is dismal and the method has no net profitable expectancy.

You will find it a lot easier if you look for a method with a less demanding R:R. For example, you will find many strategies that can realistically offer 1:2 R:R where you can still have a reasonable stop distance to play with.
Best of luck.
  • #6
  • Mar 19, 2018 2:47pm Mar 19, 2018 2:47pm
Quoting foxerr
hi, i searching strategy with risk reward 1:5 (or more). i using many indicators, but isnt easy to find this setup. ideally is: 1 trade profit, and 5-6 trades will get stoploss. thankyou!
YOU determine the R:R. Not the strategy.
  • #7
  • Mar 19, 2018 11:43pm Mar 19, 2018 11:43pm
Hallo tomorton,
If you dont mind, please share you knowledge here.
Thanks and regards,
Anton



Quoting tomorton
I've never heard of a strategy that allows 1:5 r:r off a single trade set-up using TA, though you cor SL/TP as suggested by hanover. Obviously though, that limits your return in money terms, unless you use a very large position size - but that brings its own problems, which a low r:r. But you can increase r:r without taking on additional risk by repeatedly pyramiding your initial trade. Keep all trades open but move all SL's to the same price, a distance back from your last entry equivalent to your original TA-based SL from your initial trade. Hard...
  • #8
  • Mar 20, 2018 12:52am Mar 20, 2018 12:52am
Quoting foxerr
hi, i searching strategy with risk reward 1:5 (or more). i using many indicators, but isnt easy to find this setup. ideally is: 1 trade profit, and 5-6 trades will get stoploss. thankyou!
Here you go, take what you can from this and make it work for YOU

1. 4 Hour chart only, price cross the 50 EMA and close other side, either up or down

2. Price forms a Fractal level

3. Enter on breakout of said fractal level, or candle close depending on your plan, risk tolerance, market conditions, time of day, etc.

When further fractals form, add on to the position as price action dictates.

It may or may not help if the daily candles are on the same side of the 50 EMA as the 4 Hour candles, do some research.

Good luck

Attached Image (click to enlarge)
Click to Enlarge Name: 2018-03-20_15-45-36.png Size: 32 KB
It takes a lot for me to IGNORE you, but you can try.
  • #9
  • Mar 20, 2018 1:54am Mar 20, 2018 1:54am
Quoting antonsatu
Hallo tomorton, If you dont mind, please share you knowledge here. Thanks and regards, Anton {quote}

Trade 1 is opened at 5000. TA is used to find the SL level, and let's say this is conveniently 100pts below at 4900. Set buy order at 5100 with SL at 5000. If price falls to 4900, T1 is stopped and 100pts-worth of account capital is lost.

Keep setting new buy orders 100pts above the last to open, and moving all stops to last trade's entry price less 100pts.

I will now jump ahead to the situation where price has risen (with no significant falls) to 5400. At this point, the basket contains 5 trades -
Trade 1 5000: unrealised gain +400
Trade 2 5100: +300
Trade 3 5200: +200
Trade 4 5300: +100
Trade 5 5400: +/-0

Stops for all trades are at 5300 and a buy order for Trade 6 is set at 5500.

Unfortunately, price never reaches 5500, but falls back to hit the stops at 5300 and all trades are stopped out.

So, the realised gains are -
Trade 1 5000: +300
Trade 2 5100: +200
Trade 3 5200: +100
Trade 4 5300: +/-0
Trade 5 5400: -100

Net result is a gain of +500.

At no point does account capital risk exceed 100, so r:r is 1:5. Simply opening a similarly sized long trade at 5000 with the same SL would have only netted +300 when it was stopped.

Of course, it would be possible to manually close Trades 1-4 when 5400 was reached for a realised gain of +1000, though this would limit any potential additional pyramids beyond that price. Still, that does represent a double-digit r:r and I can't think of another strategy to achieve that.

Do let me know if this sounds wild or confusing.
  • #10
  • Mar 20, 2018 2:00am Mar 20, 2018 2:00am
Further to my first post here, you may be able to observe or trade this if it meets you criteria

Similar on AUDUSD also, good luck

Attached Image (click to enlarge)
Click to Enlarge Name: 2018-03-20_16-57-26.png Size: 32 KB
It takes a lot for me to IGNORE you, but you can try.
  • #11
  • Mar 20, 2018 2:06am Mar 20, 2018 2:06am
hello tomorton,

Thanks a lot for your kind reply and help.
I am still confused. Would you please give some examples on real chart?

Thanks,
anton


Quoting tomorton
{quote} Trade 1 is opened at 5000. TA is used to find the SL level, and let's say this is conveniently 100pts below at 4900. Set buy order at 5100 with SL at 5000. If price falls to 4900, T1 is stopped and 100pts-worth of account capital is lost. Keep setting new buy orders 100pts above the last to open, and moving all stops to last trade's entry price less 100pts. I will now jump ahead to the situation where price has risen (with no significant falls) to 5400. At this point, the basket contains 5 trades - Trade 1 5000: unrealised gain +400 Trade...
  • #12
  • Mar 20, 2018 2:22am Mar 20, 2018 2:22am
Quoting foxerr
hi, i searching strategy with risk reward 1:5 (or more). i using many indicators, but isnt easy to find this setup. ideally is: 1 trade profit, and 5-6 trades will get stoploss. thankyou!
Hi!
Just saying
with RR 1:5 is needed winning rate 25% (Kelly criterion 0,1).

SP
  • #13
  • Edited 4:41am Mar 20, 2018 2:57am | Edited 4:41am
Quoting Erebus
{quote} Here you go, take what you can from this and make it work for YOU 1. 4 Hour chart only, price cross the 50 EMA and close other side, either up or down 2. Price forms a Fractal level 3. Enter on breakout of said fractal level, or candle close depending on your plan, risk tolerance, market conditions, time of day, etc. When further fractals form, add on to the position as price action dictates. It may or may not help if the daily candles are on the same side of the 50 EMA as the 4 Hour candles, do some research. Good luck ...
Nice one Erebus!.

Just took a quick look at this and I see them everywhere.

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Cheerz.
  • #14
  • Mar 20, 2018 3:02am Mar 20, 2018 3:02am
Just realized that I made an error......that I had used the 20EMA instead of the 50EMA.......but it still works!!.

Cheerz.
  • #15
  • Mar 20, 2018 3:28am Mar 20, 2018 3:28am
Quoting foxerr
hi, i searching strategy with risk reward 1:5 (or more). i using many indicators, but isnt easy to find this setup. ideally is: 1 trade profit, and 5-6 trades will get stoploss. thankyou!
I'm staggered how many people on this forum expect a free ride.
If you receive information for free you will not value it.
Feel free to disagree if you dare.
Cheers, H
  • #16
  • Mar 20, 2018 3:46am Mar 20, 2018 3:46am
Quoting Aich
{quote} I'm staggered how many people on this forum expect a free ride. If you receive information for free you will not value it. Feel free to disagree if you dare. Cheers, H

I understand where you're coming from. Maybe like me it also cost you years of effort and cost thousands of pounds of lost trading money to get where you are today.

For this period of my trading career I am happy to post what I do, but this is not out of charity towards other traders. I want forum members to critique and challenge what I do and to pull it apart. Two possible outcomes may derive - one, I abandon a given strategy as its not the winner I thought it was and so I get a better one into operation, or two, I improve my strategy and make it even stronger.

Once I've achieved either of these, I won't be posting or visiting trader forums any longer, there would be no point. I assume you're still perfecting a profitable strategy like me. Until you have the perfect strategy, you will find that the more you post about it, the better you can make it.

If you have the perfect strategy already, why are you wasting your time here?
  • #17
  • Mar 20, 2018 3:59am Mar 20, 2018 3:59am
Quoting krismitt
Just realized that I made an error......that I had used the 20EMA instead of the 50EMA.......but it still works!!. Cheerz.
You might get more entries, more stop outs, control the risk and see what happens

It takes a lot for me to IGNORE you, but you can try.
  • #18
  • Mar 20, 2018 4:02am Mar 20, 2018 4:02am
Quoting Erebus
Further to my first post here, you may be able to observe or trade this if it meets you criteria Similar on AUDUSD also, good luck {image}
Let's see....
Attached Image (click to enlarge)
Click to Enlarge Name: AUDCAD Erebus.jpg Size: 41 KB

Cheerz.
  • #19
  • Mar 20, 2018 4:03am Mar 20, 2018 4:03am
Quoting Erebus
{quote} You might get more entries, more stop outs, control the risk and see what happens
Not at all....was a honest mistake. I will work with the 50EMA

Cheerz.
  • #20
  • Mar 20, 2018 5:45am Mar 20, 2018 5:45am
Quoting krismitt
{quote} Nice one Erebus!. Just took a quick look at this and I see them everywhere. {image} {image} {image} {image} Cheerz.
Well... I have designed perfect dashboard in HL-LH Breakout dash thread especially for that type trades
if you are interested it will help you find signals on Multi - TF and easier following on multiple pairs
Take it easy.
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