I get your point so to clarify this is what we are talking about. A scalp trade with the SL 10 times larger than the TP still has no edge, despite the fact that you are more likely to win more frequently.
Let us assume that you enter a trade with TP 12 pips and SL 120 pips, and for argument sake or ease of calculation there is no spread and no broker commission. So working just based on the distance the market would have to move to hit you TP or SL and assuming a random market, the probability that you will hit TP is:
120/(12 + 120) = 0.909090… or 91% - let us say 90% and therefore the probability that you will hit stop loss is 10%.
if you enter a normal trade configured like that where the profit when you hit TP is £100 say and the loss when you hi the SL is £1000 then the expected value should look something ilke this.
(0.9 x 100) - (0.1 x 1000) = 90 - 100 = (-10) - No Edge
So we are trying to see if you can find edge with a 3 times rollover on the Swap interest. So the Swap interest for USDTRY with a 120 pips SL (& £1,000 risk) is roughly £250; if you hold the position overnight (10pm) that is the interest that is applied to the trade. So going back to the same trade configured as a scalp the profit if you hit TP is now 100 + 250 = £350 and the loss if you hit SL is now 1000 - 250 = £750.
Now the expected value for the trade should look like this:
(0.9 x 350) - (0.1 x 750) = 315 - 75 = (240) - there appears to be edge.
The problem is:
- the spread usually widens
- many people must do the carry trade
- other unknowns
So how do these factors come together to erode the edge that should be built into the trade. I believe that you can only find that out by forward testing to see if the results match up with the theory.