Australian (ASX) Stock Market Forum

How to figure risk to reward (a formula)

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as i feel the DOW will fall again tonight and im bearish on those two stocks.
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Feelings are always a great indicator.

There is no point in wasting time with this guy he's an FP and knows everything.
With people who call themselves FP's who have no idea of risk management in an industry which at best is struggling and seen as hopless at managing clients money and excellent at selling self serving product---what hope has Joe Public got of making a quid going to talk with the likes of these guys, and being charged for the privilage.
 

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Whats my personal trades got to do with the financial planning industry and financial planners?

I told you in another post a few days ago 90% of planners are crooks and 10% are genuine.

You seriously think I would be trading CFDs with other ppls money? It would not be allowed within my licensee requirements anyway!

I told you a few posts ago I am inexperienced in trading, so keep your mouth shut if you don't know the facts.
 
clayton4115 said:
You seriously think I would be trading CFDs with other ppls money? It would not be allowed within my licensee requirements anyway!
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It's not that he is saying you trade CFD's with other peoples money

It's just that you know nothing about the sharemarket, and you are simply gambling with your money. (my words not his)
 
i do agree with you 100% there are alot of product floggers, believe me ive worked in a few financial planning practices and i know what goes on, i had to explain to poor old ladies that they wont see their $50k anymore because of a high flying cowboy adviser who swindled them and put them in a product bc of high commisions, but its quite disrespectful to taint me with the same brush.
 
I love "feeling" traders

"I've got a feeling this one will go up so im going to buy!"

Guess why 90% of new traders lose

They are "feeling" traders.
 
Facts.
You basically use gut feelings for deciding on a position.
You trade excessive leverage.
You cannot calculate your risk correctly.
Your supposedly trained in a position where you should know better.

Another passenger on the Aussi Ship of Fools.
 
i used to trade like you, i learnt the hard way after bout 4 month of work to get 3 grand, i lost it all over 2 bad trades over 2 day because of the high volumes i had and no stop loss. ide always enter a trade with 1000 shares or more and if it went against me ide wait till it came bak. i learnt wen two trades never came back and i lost all the profit i made over 4 months. now im reading adaptive analysis and trade your way to financial freedom which explains everything the people here are tryin to tell you.

anyway cut you losses short and let your winners run.
what i did was cut my winners short and let my losers run,:banghead:
the gambling does work nicely for a while tho and i loovvveeee gambling ;)
 
Clayton, the point is you're taking on craploads of risk. Probability dictates that you will lose your $5k sooner or later, pure standard deviation fluctuation will wipe you out. We're not trying to have a go at you; just that a LOT (if not all) of us have been down that path and have lost the lot.

GL anyway.
 
lol, why doesn't it surprise me you're a FP.

Poor risk management - taking on way too much risk for too little reward. And then using a reporting method that inflates your % return but the actual $ return vs $ risked is poor.
Sounds like a FP to me, any wonder they get such a bad wrap on these boards.

In the CSR trade you are risking over $500 with your mental stops (provided you stick to them) but what is your reward? If you get lucky tomorrow it might drop another 5c or so - you'll make maybe $350 minus fees. You can keep those odds.

skyQuake said:
Clayton, the point is you're taking on craploads of risk. Probability dictates that you will lose your $5k sooner or later, pure standard deviation fluctuation will wipe you out. We're not trying to have a go at you; just that a LOT (if not all) of us have been down that path and have lost the lot.

GL anyway.
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Clayton if you're serious about trading and being profitable over the long term I suggest you take on board the above post and what some of the other experienced traders here are trying to tell you.
Trading is all about managing and controlling your risk, most of us have learnt this the hard way - maybe you will to.
 
CTX Up to $12.90 and still gunning

Must have had a pretty good "feeling" that it's going down :)
 
So what happened here? A good thread for newbies to read on how not to manage money?
 
i am not going to comment any more on my personal trades, what i win or lose is what i have to deal with, so you all can go suck eggs!
 
clayton4115 said:
i am not going to comment any more on my personal trades, what i win or lose is what i have to deal with, so you all can go suck eggs!
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Clayton,

While it may appear that some members here actually want you to fail, i can assure you thats not the case. Many of the longer term members here have seen this regularly, a newish member comes along and talks about how well his trades are going, only to reveal the massive risks he is taking. Its not that people want you to fail, its that they know you have a 99.99% chance of failing over the long term with a risk reward ratio like you use.

We have all been in that situation, myself included, and for some reason everyone seems to think they are different to everyone else that lost money originally.

If you are serious about making long term consistenet money from trading the markets have a look through a few threads here with regards to money management and risk:return

Hope that helps a bit.
 
Frankly CTX is a good short in my view.
CSR a possibility.
Its the Risk which is perhaps excessive to most.
If it comes off leveraged as he is he will be a genius.
If it doesnt he'll be a failed genius.

Personally I cant see why or how a novice can entertain trading like a MAVERICK and not expect to recieve some flack.

But to answer the question "How to figure risk to reward (a formula)"

http://www.isigmasystems.com/mm.html

then Click on ARTICAL in the last paragraph.
Particularly clayton.

Must go have some eggs to suck.
 

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