Risk/Reward Ratio

[taowave]

You and Redneck should spend 5 minutes reading up on the Kelly Criteria...

Risk IS the probability of event happening or not, not how much $ one can possibly lose.

 

[taowave]

Agreed,but it was taken as an insult and that was not my intention.

Sir, you should stop here:

 

[SunTrader]

You and Redneck should spend 5 minutes reading up on the Kelly Criteria...

I have already but it has nothing to do with the dictionary (pick any) definition of risk.

 

[newwurldmn]

Risk IS the probability of event happening or not, not how much $ one can possibly lose.

In finance parlance, risk is absolutely a pnl figure. If you don’t own any stocks, you have no risk to stocks going down regardless of the probability of the stocks going down.

 

[murray t turtle]

Risk to Reward
One of those b...s terms the industry made up and uses
Reward - does anybody (other than the invisible ones) - really ever know how far price will move in their favor - no
And if you think otherwise - then you're essentially saying you can accurately predict price movement
Risk - this the only one of the two that can (and must) be defined (and obviously adhered to)


Stop needs to be place where the position has broken down and no longer valid (behind a "defended" level or similar for example)

Then..., position size needs to be such that it within one's risk tolerance
RN

%%
TRUE;
partly, except still a valid principle , even without ''knowing''+ not a prediction.
History helps, QQQ tends to do much better reward than SPY;
QQQ averages better reward , but not every year.
Ag business + others uses weather forecast, risk + reward ; but that also is not a prediction.
Most likely why they call it a weather forecast, not weather prediction
Good points, RN.

 

[SimpleMeLike]

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.

Good Evening mervyn,

I LOVE it. Very good results and thank you for the response with details.

Great work. Thank you