How to figure risk to reward (a formula)

Caliente · 7 June 2009

Clayton - suck in the hubris and listen to the gurus here =)
You are getting a VALUABLE lesson here that will save you from getting badly burned like the 95% odd first time losing traders out there who would never get the benefit of the decades of experience that you have here.

Don't look at your CFD account as just an expendable portion of your total portfolio. Be DEFENSIVE.

Protecting your capital is the key to sustained growth, and if a 100 tick move in one stock will destroy your entire portfolio - that is insane when you are holding OVERNIGHT positions!

PS - if you're looking for a shorting idea, I'd recommend taking a peek at WES. Merrill Lynch have just released a scathing report - it wasn't pretty reading, but as always DYOR.

Cheers
-Cali

gav · 7 June 2009

tech/a said:
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.

Thank-you tech/a, I found that link very useful.

Boggo · 7 June 2009

Use your own % risk value, example here is based on 2%.

Some other very worthwhile info on this site too...

http://www.incrediblecharts.com/trading/2_percent_rule.php

Trembling Hand · 9 June 2009

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!

That's funny you were all to happy to throw around your return on margin figures but now that everyone has told you that you're fooling yourself and headed for a quick blow-up you don't want to play.

Well I guess thats something learnt. You must be feeling uncomfortable about the way you are "trading".

clayton4115 · 9 June 2009

my trading is going very well, look at CSR, look at CTX, and you thought i was dumb?!?!?!

Trembling Hand · 9 June 2009

clayton4115 said:
my trading is going very well, look at CSR, look at CTX, and you thought i was dumb?!?!?!

Did you not short CTX somewhere in the 12.60s and hold it 3% offside?

Nearly all your margin?

clayton4115 · 9 June 2009

yes it will fall further, i cant check my positions as i am at work.

nomore4s · 9 June 2009

clayton4115 said:
my trading is going very well, look at CSR, look at CTX, and you thought i was dumb?!?!?!

Clayton, no-one thought you were "dumb" or that the trades you had on CSR or CTX were bad trades - just that the amount of risk you were taking on relative to the reward and your account size was too high.

You can continue to carry on like an immature little school kid trying to rub our faces in those 2 trades but if you continue to ignore the risks you are taking on it will only take 1 or 2 bad trades to wipe out all your profits or even your account completely.

We have all been trying to help you improve your trading but obviously we have been wasting our time as you seem to know best. I've finished wasting my time trying to help you.

Good luck.

nunthewiser · 9 June 2009

LOL..........no further comment needed

this comment was in regards to holding cfd positions using wide account devasting margins when one is unable to view whAts going on with it

no offence intended but asta la vista baby

beamstas · 9 June 2009

Trembling Hand said:
Did you not short CTX somewhere in the 12.60s and hold it 3% offside?

Nearly all your margin?

T/H i think he said somewhere he was trading at $50 a tick? 1%of his account per tick (could be wrong just remember reading it)

CTX has gone to nearly $13.10

Thats like.. $2500!

If so he is fearless!

clayton4115 · 9 June 2009

but im only looking for a few cents change and then exit the trade.

nomore4s · 9 June 2009

beamstas said:
T/H i think he said somewhere he was trading at $50 a tick? 1%of his account per tick (could be wrong just remember reading it)

CTX has gone to nearly $13.10

Thats like.. $2500!

If so he is fearless!

I think that was the CSR trade - I don't think he told us how many shares he had on the CTX trade.

clayton4115 · 9 June 2009

ok maybe $50 is too much, i will bring it down to $5 next time.

beamstas · 9 June 2009

nomore4s said:
I think that was the CSR trade - I don't think he told us how many shares he had on the CTX trade.

Ohhh ok, Cheers

beamstas · 9 June 2009

clayton4115 said:
ok maybe $50 is too much, i will bring it down to $5 next time.

Work it out on a risk per trade.. not per tick!
Risk say 1% per trade ie $50

So if you put your stop loss 20c away

Thats 250 shares!

Trembling Hand · 9 June 2009

clayton4115 said:
but im only looking for a few cents change and then exit the trade.

CLASSIC!!

You see no problem with letting a trade go 3 -5% against you then take profit at 0.5%

beamstas · 9 June 2009

Trembling Hand said:
CLASSIC!!

You see no problem with letting a trade go 3 -5% against you then take profit at 0.5%

You know the old saying
It's only a loss when you sell!!

nomore4s · 9 June 2009

clayton4115 said:
opened another Short with CTX at $12.59, its sinking like the Titanic!

clayton4115 said:
my trading is going very well, look at CSR, look at CTX, and you thought i was dumb?!?!?!

You're gloating about CTX and it's not even in the money

clayton4115 · 9 June 2009

why do i need to gloat about CTX when i made much more ROE on the other ones as shown in this message thread.

prawn_86 · 9 June 2009

clayton4115 said:
why do i need to gloat about CTX when i made much more ROE on the other ones as shown in this message thread.

So far you have only shown us 2 live trades. the rest were hindsight trades that could have been made up by anyone.

Hence we are focusing on the 2 live ones.

How to figure risk to reward (a formula)

Caliente

Black Gold!

gav

Boggo

Trembling Hand

Can be found on the bid

clayton4115

Trembling Hand

Can be found on the bid

clayton4115

nomore4s

Commonsense isn't that common

nunthewiser

beamstas

clayton4115

nomore4s

Commonsense isn't that common

clayton4115

beamstas

beamstas

Trembling Hand

Can be found on the bid

beamstas

nomore4s

Commonsense isn't that common

clayton4115

prawn_86

Mod: Call me Dendrobranchiata

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How to figure risk to reward (a formula)

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