Risk-reward ratio and win-rate how to use these indicators correctly

Risk-reward ratio and win-rate: how to use these indicators

Derive benefits from every executed trade. Find a balance between the indicator of profitable trades and relation between the risk and yield. If you are an intraday trader, do not aim only at a big number of profitable trades but also at their quality. It might seem that if you execute 70% of profitable trades, […]

Take profit: what it is, how to calculate and post it

Time stop. How to use the time factor in trading

The time factor in trading is often undervalued. Theoretically it may help traders to make more efficient trading decisions, move up the bottom level of profitability and facilitate an immediate closure of loss-making positions. The time factor could be used by different types of traders for improving the decision making process regardless of the trading […]

Reward and risk. Destroying stereotypes

We welcome all readers of our blog! In our today’s article we will try to destroy the well-established stereotypes in the interpretation of such an indicator of the trading system efficiency as the risk-reward ratio. In this article: False stereotypes in understanding reward and risk. Trading efficiency depends on a complex of indicators. Example of […]

Limitation of losses - start thinking about money. Part 1

Limitation of losses – start thinking about money. Part 1

It is well-known that good traders are masters of risk management. Risk management includes a detailed trading plan, rules of posting stop losses and limit orders and also the management of open positions, while keeping emotions under control. Good traders, as a rule, follow a clear trading plan, which places an emphasis on preservation of […]

A futures position calculate the optimal size

A futures position: calculate the optimal size

Perhaps the most important question a trader asks himself sounds like this: “What is acceptable risk for the next trade?”. The main factor which justifies risk increase is the position size or, in other words, a number of contracts acquired by a trader as a result of a trade execution. The trade size has several […]

Diversification. How to diversify risks and

Diversification. How to diversify risks and portfolio

In this small article we will explain to you: What diversification is? Why it could be ‘naive’? How to protect your investment portfolio against risks with the help of diversification?