Quote:
Originally Posted by marciano999
What about risk-reward ratio? you are saying that you exit with 1 pip profit for example or lets say 4 pips, but the next level for the stop loss is 10 pips away. Thats a 2.5-1 ratio.
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This is where it gets little "different". This is my personal approach to the risk-reward ratio aspect. True, the numbers show that the ratio is not acceptable when you are trying to just go for 1 pip. But since my initial investment was very low to start with, to me it doesn't matter. For example in one of the accounts I set up I got a group of folks together and we all pitched in $20 dollars to build a $400 account. I and another fellow managed that amount and were able to get it up to 5 digits in 2 months. Now the idea here is that if at any time we were to blow the account the only amount that was at risk for each of was $20 dollars. So therefore the risk is minimal when compared to the gain. With this in mind we can take certain "risks" that are considered unsound. Like for example risk 10% of the account. All of us are aware that if we were to ever blow the account we could easily start over because all we are really risking is a small amount. The thing about TRO's approach is that you develop a consistent method that yields a good probability of success.
I know this logic is not the usual but you have to put things into perspective. The most import element of trading is you and your ability to learn the method and use it effectively to add pips up. The rest is just numbers, addition, multiplication, and etc. Concentrate on your ability to become a great trader and the rest will follow.
Hope this helps. As soon as time permits I will post results.