Paper Trading

[tvrssvk]

Hi AW10,

Thanks for your suggestions.

Support/resistance levels----pivot high/low approach------will refer this thread and will decide the target/stop loss.

What should be the risk/reward ratio------how about 2:1

 

[AW10]

Reward Risk ratio - higher the number better it is.. Basic common sense approach.
But in trading, There is no single correct number for this. It depends on your strategy and the timeframe that u are using.

At the same time you can make money with low reward risk ratio system (even < 1) but high % of winning trades as well.

Important is to understand this ratio and make informed decision to take a trade with RRR of 1 or < 1. It is matter of personal preference.

My rule is to look for RRR of atleast 1.5. But for some options trades using spreads, I compromise on this number and take even lower RRR trades as long as probablity is high.
For swing trades, minimum RRR is > 3.

There is no gurantee that I will get the planned Reward.. but this helps in selecting and focusing on right trades and avoiding other average trades. In long run, taking no trade is better then taking trades with 1:1. Cause when u take 1:1 trade and include brokerage in your analysis, the effective RRR will be < 1.

Happy Trading

 

[varunkengg]

umm so coming to the topic ... what does insufficient volumes really mean in moneybhai ?? any answer related to the actual question ?

 

[tradingcf]

Yes, you are right about the greedy and fear.