3:1 Reward/Risk ratio: too high with trailing stop loss?

[adamgalas]

Right now I am refining a system that seems to work well, and that up till now has used 25 pip SL and 50 pip TP.

However, with icycloud opeining my eyes to the manual stop loss, I now realize that I need not fear a high Reward/Risk ratio for fear of not locking in profits.

So my question is this. Would changing the reward risk ratio from 2:1 to 3:1 improve overall profitability, when done with the following trailing stop loss methodology?

At 20-29 pips profit change SL to +5, from 30-39 pips +10, over 40 pips, SL is +50% of profit.

In this case I would place 25 SL as standard and TP of 75 pips, and whenever I have time I would check in on the market and ajust profitable trades to lock in profits via the manual trailing stop loss.

I would appreciate feeback on what reward/risk ratio is best when useing 1 day charts.

Please let me know what you use.

Obviously the benefit of the trailing stop is that you can gurantee a profit and thus are free to increase reward/risk ratio and thus, hopfully, maximize a longer term trend.

All replies are appreciated.

[icycloud]

Its not the number of winning or winning percentage that is impt. For eg, u can profit many winning trades, but a single losing trade can wipe your acc out.

Its The overall with combine winning and losing trades, your would still have profitted.

Regrads/

[adamgalas]

don't worry icycloud I know all about money management. I always risk only 1% of my account, which in my system setting a SL of 25.

My question is, what kind of reward/risk ratio makes sense?

I set 2:1 for the system so far, and am up 1.82% after 4 days because 4/5 of my profitable trades, (system is 5-7 so far) were 50 pip TPs. The last win was a smaller 17 pip profit from useing a manual stop loss of +17 after I saw my trade was +34.

If am hopeing that by changing the standard TP to 75 pips, 3:1 reward/risk ratio, that I may be able to catch major trends and have my wins, currently 42% of all trades, really crush my losses.

I will open a new account with 4:1 reward/risk ratio as well as change my old one from 2:1 without manual trailing SL to 3:1 with manual trailing sl.

Then on the new system, when I hit 100 pip TP, I will increase reward/risk to 5:1 and so on until I see how high I can go. I will let you all know how it goes on a weekly basis. And if the system is a winner I will let you know the parameters I am useing.