Risk/Reward Ratio

[mervyn]

“No one” when I provided you with the contrary evidence. Buddy … If you don’t use stop and don’t know the notional value of your underlying … I feel sorry for you.

Ok, I will play along.

sum(abs(notional)) 2021 1,675,166,167.50
sum(abs(notional)) 2022 611,427,993.75

Those were all cme products traded (round trip) with a popular dicount broker here. ES. MES, NQ only, if you must press notional calculation. Haven't counted other 2 accounts traded, ZN and CL too.

 

[mervyn]

That's what ET is for silly. Find an idiot to argue something stupid with or go down to politics and state a strong political opinion, all the while keeping your chart open on one side of your main screen and wait for the golden goose to set itself up or to let a trade you are confident of run.

and don't forget the pronhub for stress relief.

 

[Sekiyo]

it is binary, so 50/50, other factors aside.

If it’s binary then just place a 2 to 1 trade.
You’ll win 2 or lose 1 half the time.
That’s a 50% edge. Congrats !

 

[mervyn]

If it’s binary then just place a 2 to 1 trade.
You’ll win 2 or lose 1 half the time.
That’s a 50% edge. Congrats !

Or could be the opposite, lose 2 and win 1.

Each trade is independent coin flip, normal distribution is 50/50, the fewer times you toss a coin, the more likely they will be skewed to either side, like TPO, Volume Profile strategy.

But of course, other factors such as news, earnings, etc come into play. Asset pricings are not a normal distribution but log normal, no negatives. That's why long bets have better win rate than short bets.

If next recession ever come, buy the dip, until then...

 

[vanzandt]

and don't forget the pronhub for stress relief.

Does that website give you Kroger's fuel points if you spend a certain amount?

 

[paulsfz]

What part, in your opinion, does the risk/reward ratio play in your decision-making process, and how do you balance risk and potential financial gain?

Not more than 25% of deposit is resonable rule, los more than 30% means closing the position, even speculation plus resistance and support lines with the efficiency at the level 30-40% and closing small loses and count big profits is able to bring you rational payout.

 

[Overnight]

“No one” when I provided you with the contrary evidence. Buddy … If you don’t use stop and don’t know the notional value of your underlying … I feel sorry for you.

Nobody here needs to care about the notional value of a CME product, because it doesn't matter if you're in and out of the thing all day. Or even carrying it for a time. The leverage the CME provides makes it possible so one doesn't HAVE to have the cash needed to carry the notional equivalent to trade the damned thing.

$12,300 USD, that's the current initial requirement. Yapping on about the notional equivalent of what one "trades" is like KCalhoun going on about his cost-basis traded in stocks. Doesn't mean anything except for faux dick-size comparisons.

 

[murray t turtle]

Only Profit Targets ?
You forgot about the margin call
Unless you have more than 220K for trading ES with 1 lot.

%%
OK;
so do some stuff that is not ES. Some good brokers, SCHW, disclose they are not even required to give a margin call before liquidation.
I learned something in past 52 weeks about a margin call\ i never knew;
TDAmeritrade founder father said in bear of 2000-2002, by the time '' some'' of his clients got FDX notice of margin call, market had turned, worked well for those . LOL..
No belief in a random walk could help also; so we know its not a prediction+ unknowns exit........
Good reason to call it weather forecast + not prediction
One can get a clue, [sure not a prediction] with trend study of 50+100 years of trends.
I prefer less risk, but since some excellant trends, require a bit more risk=OK also.
Thanks ; since 80% small businesses fail, be one of the 20%.

 

[Sekiyo]

Nobody here needs to care about the notional value of a CME product, because it doesn't matter if you're in and out of the thing all day. Or even carrying it for a time. The leverage the CME provides makes it possible so one doesn't HAVE to have the cash needed to carry the notional equivalent to trade the damned thing.

@mervyn said "I let my account size to buffer the drawdown"

I was expecting him to understand his full risk while holding 1ES
But it looks like he doesn't know nor does he really care about it.

Since he does trade without Stop loss
He needs 220K+ for his account size to buffer the DD

Sure we're day traders ...
How many Day trade turned into swing ones ?

That's my point.

 

[mervyn]

@mervyn said "I let my account size to buffer the drawdown"

I was expecting him to understand his full risk while holding 1ES
But it looks like he doesn't know nor does he really care about it.

Since he does trade without Stop loss
He needs 220K+ for his account size to buffer the DD

That's my point.

Are you sure? Have you ever held 1 ES overnight?