Ok. Having an absolute brain fart and this seems easy enough but I feel like its wrong. In my journey of keeping a high win/loss ratio and locking profits, I was wondering:

I take half off at a certain point and bring the other half to atleast BE. In order to keep atleast a 1:1R on all my trades, the first half must reach 1:2R if the 2nd half happens to close at BE.

That is not the way how you use R:R ratio
First you need to calculate your system win/loss ratio, so you need to start keeping record of all your trades. After you have the win/loss ratio of your system, then you can start looking for a R:R ratio that will make you profitable in the long-term.

Average R is technically expectancy. In order to calculate average R, however, you need sample Râs.

To the OP:

Yes. If you take out 50% at R = 2 and your stop is hit at R = 0. You have made 50% or R = 1. If you take out 50% at R = 1 and your stop is hit at R = -1 (i.e. initial stop), you have made nothing.

The moment you change your r:r ratio, the win rate will change. If you increase your R:R your win rate will decrease, if you decrease it, the win rate will increase. You cant just say hey, I get a 50% win rate tossing a coin, Iâll increase my R:R to 3:1 and Iâll be a millionaire ! Change the R:R to 3:1 and watch your win rate fall through the floor !

Messing around with R:R and win rate will not provide an edge, if thereâs no edge present, then this isnt something that can be optimised. If it was that simple, any fool could do it.

My method gives me roughly a 65-70% with a 1:1. I get what you mean about trying to optimize a better R:R but what Iâm trying to figure out is how to keep that 1:1 if I start closing half the trade and then the second half hits BE. Let me see if I got this (its just some math boggles my mind sometimes):

[B]10pip SL/10pip TP
Close half the trade at 10pip to lock in profit and let the rest run.
Price returns and hits BE[/B]

This would give me 1:.05 so I would still remain profitable with a 70% win rate but a 1:1 always looks better. So, in order to get an overall 1:1 following this exit method, I would have to shoot for a 1:2 on the first half, right? I might be over complicating things but that seems to look right.

Honestly, disregard gasanvillâs post. Expectancy (the ultimate statistic that judges whether you ultimately profit or lose, period) is described by (win rate * avg profit) - (loss rate * avg loss). If you have no edge, your win rate will be completely proportional to your avg profit (you slide your win rate up, your avg profit goes down, vice versa). If you have no edge prior to calculating expectancy, you will never make a profit. It is mathematically and realistically impossible.

Itâs fairly simple to calculate what your R would be if you âpartial closedâ a positition. Just multiply the closing position R by the percentage you took out.

It gets a little complicated because at the moment you only have the expectancy for the 1:1 trades. To calculate this correctly you also need to know the probability of hitting the 2:1 trades as well.

the attatched pdf discusses a method which might help, but IIRC the algebra is wrong on a couple of the examples but youâll get the general idea.

You are wrong. It depends of this: pair traded, time of the trade, duration of the trade. IÂ´ll give you and example: Is not the same to increase the R:R of the GBP/USD at london session than increasing the R:R of USD/JPY at 17:00 EST time. And also: when to close the trade? before london closes?, before NY closes? In the case of the GBP/USD you have more chances to keep the same win/loss and make more profits due to the volatility and in the second case youe have more chances to reduce your win/loss.

If you think that âmessing arroundâ with win/loss and r/r is that simple, think again. It involves a lot of other variables, like: maximum week loss, maximum risk per trades, maximum day loss, maximun trades per week, maximum trades per day, maximun pairs traded per day. In what part ot the trade you are? is it a day trade? a swing trade? is a day trade turning into a swing trade?, pair traded, time of the traded. When you know how to put all those variables together and use them to maximize win/loss and r/r then you start making money. THAT IS YOUR EDGE. It takes a lot of effort to get there.

Dont worry, is okay to make those mistakes in your early days of trading, you will see it some dayâŚ

I assume you are a very profitable trader to advice other people to disregard my post. You seem to know a lot of theoryâŚwhat about live trading? Tell us about the edge of your profitable system.

Iâm sure Iâve suggested Iâve been live trading since Feb 2010 more than once on this board.

In literal terms, an edge is something that is neither affected by your win rate nor your average profit. It is something you have found in the market that is consistently profitable without taking into account profit targets. As simbaFX suggested, a coin has the possibility of ending up heads or tails. Theoretically, this is 50:50. If you gamble 1:1, you would win nothing and lose nothing. If you were to gamble 3:1, likewise, you would win nothing and lose nothing. This is mathematically and realistically proven. The same is applicable to the market. If you aim for 1:1, you have a far greater chance to hit that target than if you aimed for 2:1, UNLESS, you know exactly when it is most probable for the market to achieve 2:1.

If you enter the market based on a coin toss, you will lose as expectancy is not in your favor (due to spread). Thus, in order to profit from the market, you must have an expectancy that beats the sum of random chance and spread. If your system canât do that, then any profits you attain from the market is nothing but statistical noise.

Learn the market and devise a way to quantify an edge. That is my suggestion. Money management can help maximize your profit if you have a winning system (POSITIVE expectancy) but it, solely, cannot turn a negative expectancy system into a winning one.

NO IT ISNT ! You really do have zero comprehension of what constitutes an edge. One day, when youâve chased your tail around for long enough, and the trivial statistics that youâve wasted your time collecting finally start to sink in enough to start making some sensible conclusions you might just begin to understand just how ignorant a statement youâve made.

Dont worry barb, my intention is not to win a debate, specially with such a limited trader like you.
You have almost ZERO live trading experience. Most of your answers can be found in google âedge is something that is neither affected by your win rate nor your average profitâ or "âEvery man has a right to his opinion, but no man has a right to be wrong in his factsâ, which proves again that you have almost no clue about the market, You are so lost in your ideas that you cant see that i agree that the edge is one of most of the important things. Read again my posts. In fact, i wrote in an early post some of the variables that you have to consider and analyze to create ypur own system with an edge. When developing a system some of the most important variables to consider: pair traded, time of the trade, duration of the trade, maximun week loss, maximum day loss, risk per trade, maximun pair traded. Analyze all that, incorporate them into your system and you will find and EDGE. How do i know this? Because i have learned through experience.

So next time do me a favour: when you UNDERSTAND the concept of edge and know how to find it and apply it in the market and your system, and you have found a system with some edge, come and share your experience with us. But dont tell me:
âhey men, learn the market and devise a way to quantify an edge. That is my suggestion. Money management can help maximize your profit if you have a winning systemâ.

Because let me tell you something: I ALREADY KNOW ALL THAT STUFF. ANd i knew it before even you started trading. THanks for the advice, i never menospreciate an advice, but i could give you a million lessons about money management if you want.

Who are you to advice other people to ignore someoneÂ´s adivce? IÂ´ve seen other post in other threads when you talk like you have the holy grail in your hands. So take it easy kid, be more humble, and keep your mouth shut if you dont know what you are talking about.

And to Symbax, thanks for the insult, but i will bother to answer when you have something useful to say.

When the day comes that youâve developed an edge, and gained some experience worth discussing youâll be entitled to express an opinion. Until that day comes, do everyone a favour and keep your deluded rambling to yourself.

MT was right to advise ignoring your advice. Trading can be difficult enough for the inexperienced, without you throwing in misinformation, you really are a nuisence.

I believe the idea that is being put forth is that if you reduce your r:r then you will find that your win percentage goes up. So as an extreme example, if you make a trade and try to get 5 pips and risking 50 pips, then you will most likely win more often (regardless of time of day even) than risking 5 to make 5.

Yes, thats the point being made. His post implies that by constantly measuring performance, and determining MAE and MFE heâll discover an optimum sweet spot which suddenly provides an edge.

It doesnt work like that, those tools can only be applied once an edge is already is existance.

What he also fails to grasp, is the statistics that heâs recording are provided as standard by many charting applications. The whole world (apart from a few clueless newbies whoâve just discovered forex and metatrader) have access to the same analysis data at the press of a button, so his coments about it being a great deal of work are also nonsense.

If he was right, anyone with a half decent charting application would be profitable !

Falling into the trap of trying to optimise a zero expectancy system, being fooled by the effects of random chance isnt a healthy place to be. Its going to take him hundreds of thousands of trades before he has statistically valid data to realise this. Heâs on the first step of a thosusand mile journey (and already going in the wrong direction) but the place to do this sort of analysis work is in backtest.

He wont take any notice of my advice, but someone might find it useful.

Nope, you didnt understand my point. I already have a system with an edge. I have already analyzed pairs, time of trading, volatility, when to trade, when to stop trading,i have become and expert on money management and some other variables that give an edge to a system. After that then i designed my system, not based in past data, but based in my experience and my knowledge of the market. What do you think? that i printed 2000 pages of historical data and started playing around? No my friend. My system is already profitable because it has an edge. What iÂ´m doing now is trying to optimize it, by measuring my own system.

Im not in the begining of a thosusand mile journey. On the contrary, im this close to become consistently profitableâŚ