Risk:Reward Natzi’s can go choke themselves - AntiVestor.com

Risk:Reward Natzi’s can go choke themselves

Risk & Reward ratios are a load of old potatoes

Perhaps it is a crock of something smelly and brown

or maybe it is nonsense…

At leat most of the time

This ratio is to be ignored – I dont use it and I dont care for it most of the time

In fact the more you risk for smaller reward the higher the theoretical probability of success you will have

Weird eh?

What would you rather have?

  1. A lower risk to reward?
  2. A higher probability of success?

I would rather have a high probability based outcome based on actual track record results than “ensure I have a good R:R ratio” like the text books say

Me: “Jeaves, pass me my retching bucket!”

On its own this ratio is useless and should be treated with the contempt it deserves

In fact – just ignore it completely because you will get more done without stressing over if your trade has a 1:5 or 1:3 risk to reward ratio

Because it is all theoretical based on mostly intangible guesstimates

I can also move the risk and reward sliders up and down to “get a figure I like” to appease the R:R Natzi’s

When you’re trading with real money in a real account come back to me and we can have a grown up conversation about it but until then keep those theoretic views to yourself

If you are making money consistently and seeing good results based on solid time tested research which has proven to be realistically attained with actual trading results then does it matter what the risk reward ratio is?

As someone who has been doing this for 22-yrs and made a living from it full time – maybe I do have a view that could be better than the theoretical armchair warriors out there – just sayin’

Hopefully you can get my playful tone here

Risk reward is but one very small facet – and as far as Im concerned irrelevant facet – to a successful trading strategy

Of course the real secret is a fine balance of risk reward AND probability which is what I focus on

That is all for now – End rant

Thats all folks
Happy Trading
Phil Newton

 


Still need a little more help?

Mr Phil Newton
 

I help traders like you become more successful with practical mentoring and a well developed step-by-step trading methodology that you can follow around your current life commitments.

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