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Bankroll and Risk Management, Risk to Reward Ratio - EDUCATIONALIn this example I am showing you how important is RIsk Management in your trading system. You could be the most talented trader in the world with a natural eye for investment opportunities, and still blow your account with one bad call without proper risk management. No matter how good you are, or how experienced you are, you’re still going to incur losses. Even the best traders in the world suffer losing trades - it’s part and parcel of trading. That’s why risk management is so important to your trading. One way that you could strike the right balance between reward and risk is to stick to a reward:risk ratio such as 2:1 or even 3:1, where your targeted profits are always double that of your maximum losses. So even if you suffer three losing trades, you’ll only need two profitable ones to ensure your total profits outnumber your losses if you stick to this reward:risk ratio. Although it’s not a general rule to follow, it can help you to visualise a specific approach to risk management. "It's not important whether you are right or wrong. It's about how much money you make." That means that you can still win 4/6 trade and you are still loosing money. In the example showed you can see that investing different amount of money in each trade can drive to a negative ROI even if yours winning rate is over 66% .
Education
by wolf-lamb
5
ORBEX: Risk Softens As Iran's Retaliation Options LimitedIran will most likely retaliate and perhaps the first move will involve the disruption of oil shipments through the State of Hormuz. But, what will China say to that, given nearly 50% of its imported oil comes from the Gulf region? For now, risk is scaling back and that’s obvious from yen outflows. Watch how the euro and dollar could perform over the next few days. Timestamps USDJPY 4H 01:30 EURUSD 4H 03:30 Trade safe Stavros Tousios Head of Investment Research Orbex This analysis is provided as general market commentary and does not constitute investment advice
by Orbex
ridethepig | JPY Market Commentary 2020.01.06On the risk front, JPY demand running out of steam from the initial knee-jerk via Iran tensions and asking for a squeeze. I am tracking 108.6x on the day to add to my shorts. Targets below are located at 107.3x support while stops can be kept comfortably above 108.9x resistance. JPY inflows will continue to come via risk as long as BOJ remains on hold and warrants increasing bearish exposure. After clearing first targets in the initial 2020 swing: Thanks for keeping the likes and comments coming, as usual jump into the conversation with your charts and questions!
Short
by ridethepig
7
ridethepig | JPY Capital FlowsAfter getting the breakout we were tracking for in USDJPY we are now back and revisiting our infamous "Loading Zone" area at 109.3x right in time for BOJ to maintain the status quo. Outside of a knee jerk via risk I expect USDJPY to hold 108 - 109 range until we clear BOJ next week. Odds of Japanese rates being taken further into the red is declining, meaning the BOJ is likely to sound hawkish via maintaining the status quo flows towards 100. Japanese consumption is falling alongside production after the tax hike and we are already starting to see this show up in store closures throughout the country, however, you can see some are already starting to argue a case for Global manufacturing recovery (unlikely with protectionism via Trump). JPY inflows will continue to come via risk as long as BOJ remains on hold and warrants increasing bearish exposure. Looking to add more $JPY shorts into the 109.3x resistance with clear jurisdictions mapped on both sides, resistance is initially found at 109.3x. While to the downside support is located at 108.2x which holds the key to unlocking the 2020 macro leg towards 100. Thanks for keeping the likes and comments coming, as usual jump into the conversation with your charts and questions!
Short
by ridethepig
5
ridethepig | Gold One Last LookA very good time to update the Gold chart after clearing inflation and FOMC yesterday. As widely mentioned in the latest macro update in the institutional room: " Here tracking for a slight uptick in inflation but nothing out of trend before the spotlight is turned onto forward guidance with Fed and 2020 dots. I expect the dots to tick down whilst leaving 2021 hikes on the table . " Inflation making a return while risk markets remain less sanguine with protectionism, impeachment, election risk and late cycle fears refusing to abate. To understand how and why we are trading the current 1475 level its important to review and dig deeper into the chart archives, this entire 5 wave impulsive sequence began from the breakout we traded live here at 1200: At this point after the breakout it was clear the large triangle formation was in play, for those with an understanding of waves this is a textbook case of an ABCDE pattern to mark the final chapters of the cycle: ...for those wondering if we also traded pullbacks in the opposite direction, the answer is yes: Now that we have reviewed the flows to date and have an understanding of the why and how, we can start to build a case for adding to our longs. It should be no surprise that this valuation driven pullback attracted buying interest from the usual suspects: It is the same story in particular for those trading XAU versus CNY: In this regard, Gold reiterated the skew towards grinding higher at least for the next year. It appears unlikely that the bar for risk-on will be met by the end of 2020, with Brexit and US elections entering into the picture it is certainly more conceivable that further upside could play out in a way that triggers momentum towards 1650 targets. Thanks for keeping the support coming with likes and jumping into the comments with your questions and charts!
FOREXCOM:XAUUSDLong
by ridethepig
3
GBPCAD wait support at 1.6600GBPCAD could go down again up to strong support of 1.6600 then bounce up. My trading plan is: - Buy limit at 1.6600 - Sell stop at 1.6450 (based on ATR 14) - Take profit at 1.7000 - Risk/Reward 2.67 ADVICE: This idea is based on my researches, do your own study and don't invest based on this idea only. If you like my scripts and ideas and find it useful to you, please consider to offer me a coffee: Donate 1$ or BTC equivalent at my blockchain wallet 1M4evumNsLBqrovYLpqATiQTLQZXUKZGYU&amount=0.00016041. Thanks Please use comment section for any feedback.
by 03.freeman
Education using BTSI'm eternally bullish on BTS, but a year-long bear situation is possible... When trading, look at the risk to reward. Shorting to the bottom of the triangle would yield 50% returns. Although you may get the false pride of buying the bottom. However, longing to the NEAREST resistance level is 100% returns. Longing to the second nearest resistance level is 300% returns. There is lots of infighting in the Bitshares community right now, but at least there is fighting going on. There is no growth without decay. Who knows? Good luck.
POLONIEX:BTSUSD
by jjjk00
4
How To Setup A TradeThe most important part of trading is risk management. A correctly calibrated risk management system helps a great deal in reducing emotions and increasing returns . There are two elements that allow a trader to control the risk of his entry: the maximum risked amount of equity per entry and the stop loss. In the example above, we are assuming that we are about to enter a long trade in XAUUSD at the closing price of $1463.30/oz. What are the steps to define the maximum risked amount and to define the optimal stop loss range? An easy way to do this is to divide the account value by 32 to find out the maximum risked amount and divide the ticker value by 32 to find out what the stop loss range should be. The fraction of 1/32 is handy in calibrating risk management metrics. Doing this helps in avoiding over-leveraged trades through defining the maximum risked amount, and it aids in minimizing the risk of being stopped out every other trade through defining a stop range that is not too tight for the market volatility.
FX_IDC:XAUUSDEducation
by Zoen_Trieste
1
3:1 R/R 100 PIPS SetupAnother solid Risk to Reward setup here. I cannot stress how important it is to have a good Risk to Reward ratio under pinning all of your trading decisions. I always look for 5:1, 4:1 or at least 3:1 reward for any capital I put at risk. This means that even if im performing badly and placing more losers than winners, I'm likely to at least break even or even sneak some profit overall. My reason for placing this short is fundamentally the euro is weak, its main pair EURUSD hit new lows today. While fundamentally the Canadian Dollar is under pinned by strong Oil prices. In terms of technical analysis, I am targeting a retest of the broken trend line here to provide some impetus for bears.
Short
by JoelWarby
IS IT WORTH TAKING THE TRADE? THE FINAL DECISIONSSo you have the "perfect" setup; all the stars align and you feel utterly confident in taking the trade, but should you? I have a process that must be completed before I even think about pressing the trigger. Fundamental analysis points me in one of two directions, then from there I'm either short or long. I then look if there is a technical entry point that lines up in the way I want to enter. The final step to take is too see what target will be and what my R:R is. For those that don't know R:R is risk to reward. So if you have 1:1 R:R and you risk 1% of your capital on a trade, then you stand to gain only 1%. This is pretty much a 50/50 gamble, and we don't gamble in trading. If all the stars align and the R:R is 1:1 DON'T TAKE THE TRADE, MOVE ON! We win by having better winning trades than looser's. Ideally I want a 1:1.5 R:R, ideally 1:2 (So if i risk 1% and my trade reaches TP I gain 1.5% or 2%). If I have a R:R less that this I stay away or risk 0.5% on a trade, but I advise you stay away from the trade and look for another opportunity. After all, there are infinite entries in the future. Happy Trading.
by joebrownFX
ORBEX: EURGBP Ready To Reverse? AUDJPY Still Correcting!In today’s market insights video recording, I talk about EURGBP and AUDJPY FX Minors. Euro is affected by a report that a phase-1 deal is highly unlikely by the end of this year as the Chinese want rollbacks pushed to May 2020 and the US Congress just passed a bill supporting Hong Kong protesters; going against China again!? Safe-haven flows were also increasing of course, following the report, allowing yen to appreciate against risk assets with AUDJPY attracting our attention once again! Pound, on the other hand, is somewhat muted as the first televised debate between Boris and Corbyn was seen as a draw. This means that the euro's somewhat better performance could allow EURGBP reverse and move higher!? Stavros Tousios Head of Investment Research Orbex This analysis is provided as general market commentary and does not constitute investment advice.
by Orbex
NZDJPY is going downNZDJPY is currently in the upper part of the range channel and it is very likely to go back down in the next hours. TP and SL are the top and the bottom of the channel respectively that I have indicated with the horizontal lines. I calculate the risk for this trade as over 3 times lower than the potential profit. Good luck! *This idea is for educational and advising purposes and should not be the exclusive base of your trades. Before trading, make your own analysis as well.
Short
by YoungMoneyBillionaires
3
GBPCAD : POTENTIAL REVERSAL ?The GBP is still at the top of the Daily strength meter v CAD which has dropped below the zero line the past 3 days indicating a push up for GBP. The problem here is that GBP has been attempting the move the past month and keeps being restricted in its advance. A break and close above 1.7100 should provide clarity to the upside for the time being. Should GBP start declining on the strength & weakness meter a reversal could be more favourable. POLITICS !!!!
by LIONHEART-FX