Re: Walters Aproach
Well, I want to make some comentaries on this thread topic I did start some days ago on RRR (Risk Reward Ratio). On my personal experience, and I think most traders have the same tendency, we get to much enthusiastic about a technical aproach and become some how very "loyal" to it... the true fact after 11 years on trading I came to the sad conclusion that just about any trading aproach has 50/50 technical performance... there is no such 70 or 80 % performance as some "gurus" tell they have... when you trade with the real thing you come up with 50% success and 50% non-success trades... if you are having less than 50% success, then you are on "School mode" yet... you need the 50/50 to consider yourself a good trader... now, dont be mean on yourself trying to get that fantasy 70 or 80 % success... you will loose precious time... the key is RRR applied to the 50/50 performance, thats my story, and I can say now that I am happy with my 50/50 performace...
So... what REALLY is this RRR thing ?... well in my experience its not just a ratio, its more than that... its a STRATEGY that has to be embeded on your technical aproach.... where in simple words you have tight stops vs long runs.... so we are talking about "closing positions" more than opening.... HA¡¡¡ dont you spend hours thinking and studing how to "open positions" ? well thats fine but after you got a plan you say in lets say 10 minutes : I will close my position such and such... or I will see as it happens... well there you go... thats where any "analist" work goes to the toilet... well, this trader NEEDS a change of mind, when you study so many hours where you are going to "open" your position you MUST include in this study "simultaneosly" where are you going to place your stop and where is your aproximate target... thats more than chart reading or a simple RRR math... it is formulating a Strategy on your trade that will keep you alive during this very dangerous journey of being a trader.... where your fellow traders are big dinosaurs with thousands time more money than you, with greater technology and the worst.... they DO have a technical aproach with real RRR on action.... so RRR should be the center of your ecuation... doesnt care what technique you use, if its trendwise or countertrend, if its based or not on indicators, if it uses old fashion stochastics or new fantastic deltas.... doesnt matter, ALL of them eventually have a 50/50 performance... RRR inside your technique will make the diference to make you profitable...
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