Risk to reward ratio?

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Hello experienced trader,

What is the risk to reward ratio you look for during developing a new technical strategy? 
 
Mahfuzur Rahman Fardun:
Hello experienced trader,

What is the risk to reward ratio you look for during developing a new technical strategy? 

ask google :)


money you risk (if position closes in loss) against profit you gain (if position closes in profit)

 
Mahdi Ebrahimzadeh #:

ask google :)


money you risk (if position closes in loss) against profit you gain (if position closes in profit)

That's not what I need know. 

I want you what kind risk to reward ratio gets you satisfaction. 
Some gets satisfied with a trading strategy that has 1:1 ratio, some want a strategy that 1:3 ratio or even more. 
Hope I have made my question clear now. 
 

The bigger the reward/risk ratio means the smaller win ratio. 

This is a psychological concept. I believe most people prefer not to have too many loosing trades. So they would not prefer the larger reward/risk like 2 or 3 or larger.

 
Mahfuzur Rahman Fardun #:
That's not what I need know. 

I want you what kind risk to reward ratio gets you satisfaction. 
Some gets satisfied with a trading strategy that has 1:1 ratio, some want a strategy that 1:3 ratio or even more. 
Hope I have made my question clear now. 

matter of give and take! if you give less and take more for sure is better.

but, optimization can help to find best RRR. each strategy has kind of its own finger print/specification and you have to find it somehow.

As I know from experience, better not to take Reward to Risk less than 1.4. this also can be used for Profit factor too. a strategy with less than 1.4 PF is in edge of fail and its profits is more or less based on chance.

 
I never focus on risk/reward ratio when I build a strategy. I focus on:

- profit factor
- average trade holding time
- maximum equity drawdown
- yearly return / max drawdown ratio

Risk/reward ratio by itself without considering what I listed above is totally meaningless and give absolutely no information about the quality of a strategy, in the same exact way of "winratio" by itself 

Of course what to look for depends on how a strategy work, for example in an averaging strategy with no hard stop loss, talking about risk reward and winratio will have no sense ever!
 
Fabio Cavalloni #:
I never focus on risk/reward ratio when I build a strategy. I focus on:

- profit factor
- average trade holding time
- maximum equity drawdown
- yearly return / max drawdown ratio

Risk/reward ratio by itself without considering what I listed above is totally meaningless and give absolutely no information about the quality of a strategy, in the same exact way of "winratio" by itself 

Of course what to look for depends on how a strategy work, for example in an averaging strategy with no hard stop loss, talking about risk reward and winratio will have no sense ever!

best items which can be list

RRR is kind of theoretical or supposed Profit factor too. if SL/TP never changes due to many reasons they do, those are almost same. 

the other factor you may forget in list is number of trades in year or month. 

 
Mahfuzur Rahman Fardun:
Hello experienced trader,

What is the risk to reward ratio you look for during developing a new technical strategy? 

For my trading style, I find a system with only a profit limit and no loss limit to be particularly attractive. While it may seem unconventional to some, I have found it to be efficient and aligning with my risk tolerance. I believe that by focusing on maximizing profits rather than setting a predefined loss limit, I can take advantage of favorable market conditions and let winning trades run. This approach may not be suitable for everyone, but it has proven effective for me in capturing opportunities and achieving my trading goals.

 
Mahfuzur Rahman Fardun:
Hello experienced trader,

What is the risk to reward ratio you look for during developing a new technical strategy? 
1:4 as minimum 
 
Yashar Seyyedin #:

The bigger the reward/risk ratio means the smaller win ratio. 

This is a psychological concept. I believe most people prefer not to have too many loosing trades. So they would not prefer the larger reward/risk like 2 or 3 or larger.

Mostly, the risk to reward will usually depend on the trend but I look up to 1:3 as minimum and 1:5 as satisfactory, better still, I keep up with the trend if there is more. 
 
Mahfuzur Rahman Fardun:
Hello experienced trader,

What is the risk to reward ratio you look for during developing a new technical strategy? 

Back testing several time frames of a market and several trailing stops will help You to standardize an average reward:risk ratio.

Volatility is the best environment where You can seek r:r >1 otherwise It can be counter productive in ranging markets.

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