Risk-reward
At Entrywho are not considering risk-rewardis a very common fact.
This is the most common among salon instructors.
“This is no good at all??”was one of the things I thought lol
※Sorry to the salon students ????♂️?
The reason is very simple.
Because you cannot calculate risk-reward before Entry
right?
In other words,
・Cannot set the Protective Stop (S/L) position.
・Cannot set the take-profit point (T/P).
These two things, basically.
I thought there would be virtually no one who sets neither, but… surprisingly there are many, right?
From my rough experience while watching the salon students…
① People who set neither S/L nor T/P →10%
② People who set S/L but not T/P →90%
③ People who can set both S/L and T/P →less than 1%
Now, I will explain in order.
① People who set neither S/L nor T/P →10%
An indicator tells you to Entry when it looks like this!!! That’s all for those people.
Or those who buy or sell based on feel… is that investing? It feels that way.
Or beginners who don’t know right from left.
Gamblers who only think about earning.
Dreamers who only look at profits, etc…
② People who set S/L but not T/P →90%
Most are in this pattern. S/L can be placed at recent highs or lows, but it isn’t clear or is still personal preference, so they can’t set it well yet, butthey want to set it.
Those who want to improve, grow, and earn tend to reach this pattern.
But in practice, it’s still by their own pip-fixed preferences and still immature?
Many don’t have the room to think about T/P yet.
Therefore, many who have not yet reached a stable earning level are in this pattern.
③ People who can set both S/L and T/P →less than 1%
If you’ve reached this level, you probably aren’t a salon student, right? It’s rarely seen lol
Perhaps there were some, but those who can do it might not have spoken up on purpose?
Readers of this article are surely desperate to earn money (I want to believe that).
Therefore you’re probably struggling with pattern ② or aiming for pattern ③.
When you can do pattern ③,the option of “Not entering”emerges.
・Because risk-reward isn’t good, it’s okay not to enter
・Because risk-reward is marginal, you can skip
If such reasons have crossed your mind, you’re at a high level, right?
・It might be gambling, but just go in!
・Yes! Enter!
If such words cross your mind, you are heading toward not making money as a trader?
Stable, continual earnings are absolutely impossible, right? ????♂️
So…
② People who set S/L but not T/P →90%
Why are so many people not setting T/P?
That isbecause they don’t know how to set T/P!
Wouldn’t you think so?
This has become quite long, so I’ll end it here for now.
Next time, I will introduce several ways to set T/P.
There is no must-have method for this.
This is only a guide, so if you find something you like, you can use it,
and if you find your own take-profit point, you can adopt that, too?
Supplement
Honestly this is a bit embarrassing, so please don’t get it wrong, okay?
Risk-reward is the ratio of reward to risk “1”.
Thereforerisk is expressed as “1”..
And the notation is…
‘Reward:Risk’
is how it is written.
Even those explaining this often get it wrongand it’s the opposite?
Those who boast while wrong…
Honestly embarrassing, you know (*ノωノ)
If you want to say profit: 2 and risk: 1, then
Risk-reward = 2:1
.
In elementary school, in math, we learnedthe relationship between ratios and fractionsright?
a:b equals a/bright?
2:1 equals 2/1 (=2)right?
Risk-reward = 2:1
which can be rephrased as
Risk-reward = "2"
is.
Those using indicators, are you properly picturing the formula in your head?
If you were mistaken, use this as a chance to memorize properly and avoid embarrassing yourself, okay?
That’s all for now.
Thank you for reading until the end. m(_ _"m)
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Thank you very much indeed.
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