[jficquette]

Originally Posted by Hlm »

It doesn't have anything to do with negative or positive risk reward. It has everything to do with positive expectancy.

Assuming 3.33:1 and 80% ...going off of 30 trades...

Wins: +24pts (24*1)
Losses: -20ts (6*3.33)
Profit = +4pts (appx)

But like MidKnight said, your commissions would have to be less than $0.67/rt to make money in this simple example.

However, there is still one piece of the puzzle missing. Commission only comes into play per transaction. So if his strategy was going for much larger swings, then it could be profitable strictly by the numbers.

I agree. Its doesn't matter how much you risk. All it matters is how much you win.

It has everything to do with positive expectancy.

John

[Dacamic]

Originally Posted by MidKnight »

... Does he either take the stop or the target, or is that just his initial placement when the trade begins and then it is modified later ...

I'm curious about this, too.

[jonbig04]

it was stop or target. he has since seen his errors and has transferred to a more sane R/R.