Higher Rewards For Less Risk
I've changed my reward-to-risk ratio from 1:1 to 2:1.
You heard me right! They have changed.
I wasn't a stickler about my ratios, but I am now. I want to make more money and do less trading. How is this possible, you may be asking?
It's simple when you look into the details. So let's take a look at the losses first.
What do my losses look like?
Each time I lose a trade, I recently exited a previous winner or wasn't in a trade on that currency pair before I lost. Let me explain because these are two different things.
When I win a trade, I give back my profits on losing trades and may not enter the next trade due to my emotions being everywhere.
I noticed that I was stopped out, and the price flowed my way. But, honestly, I can do nothing to prevent this from happening.
You may say, "well, can't you change your stop loss?"
I could, but to what? I never know when I'll be stopped out or how big the wicks will be to get me out of the trade. This means every trade is unique, and I'm making a mistake if I don't follow my rules.
Being stopped out isn't the problem. Trading my system too much with almost the same reward to risk is the problem.
Question to myself, what if you could hold the trade longer(I'm a swing trader, so this fits) and increase your reward significantly, so you don't have to keep entering multiple trades unless the reward was worth it? So now, if I am stopped, my winning trades will make up for my losses and more.
What do my winning trades look like?
My winning trades look more significant than my losses. My focus is and will always be higher timeframes. I like to trade when markets are trending. So per the daily, weekly, or monthly timeframe, I'm trading if my currency pairs are trending.
My goal is to get the best entry that fits my rules and hold to my long-term targets, and any trade under a 2:1 reward-to-risk ratio will not be traded.
I'm also ok with not being triggered into trades set by my pending orders. I'm also ok with losing trades. That's part of the business.
In Summary
I seek to hold trades longer to receive bigger rewards and let the small losses be small. I've not changed my trading strategy. It works, and I am working on it. We go well together.
My belief is as long as the market is trending, I can hold my trade.
I pray this blessed you,
Shaquan
Remember, you don't trade the markets. You trade what you believe about the markets. "Van Tharp"
You heard me right! They have changed.
I wasn't a stickler about my ratios, but I am now. I want to make more money and do less trading. How is this possible, you may be asking?
It's simple when you look into the details. So let's take a look at the losses first.
What do my losses look like?
Each time I lose a trade, I recently exited a previous winner or wasn't in a trade on that currency pair before I lost. Let me explain because these are two different things.
When I win a trade, I give back my profits on losing trades and may not enter the next trade due to my emotions being everywhere.
I noticed that I was stopped out, and the price flowed my way. But, honestly, I can do nothing to prevent this from happening.
You may say, "well, can't you change your stop loss?"
I could, but to what? I never know when I'll be stopped out or how big the wicks will be to get me out of the trade. This means every trade is unique, and I'm making a mistake if I don't follow my rules.
Being stopped out isn't the problem. Trading my system too much with almost the same reward to risk is the problem.
Question to myself, what if you could hold the trade longer(I'm a swing trader, so this fits) and increase your reward significantly, so you don't have to keep entering multiple trades unless the reward was worth it? So now, if I am stopped, my winning trades will make up for my losses and more.
What do my winning trades look like?
My winning trades look more significant than my losses. My focus is and will always be higher timeframes. I like to trade when markets are trending. So per the daily, weekly, or monthly timeframe, I'm trading if my currency pairs are trending.
My goal is to get the best entry that fits my rules and hold to my long-term targets, and any trade under a 2:1 reward-to-risk ratio will not be traded.
I'm also ok with not being triggered into trades set by my pending orders. I'm also ok with losing trades. That's part of the business.
In Summary
I seek to hold trades longer to receive bigger rewards and let the small losses be small. I've not changed my trading strategy. It works, and I am working on it. We go well together.
My belief is as long as the market is trending, I can hold my trade.
I pray this blessed you,
Shaquan
Remember, you don't trade the markets. You trade what you believe about the markets. "Van Tharp"
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