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You mention about Profit Target of a 1:1, then for actual trading you taking a 1: less than ½ ratio. Therefore, it is more risk than reward ratio, How do you justify this of being conservative, won’t I be bankrupt too soon?
Posted by Charlie Trader on 02 April 2018 02:56 PM

This is a common fallacy.

Just because a trade seems to be imbalanced as to risk/reward, that's not actually the important thing - it just sounds good in marketing material and in seminars. 

But what does it actually mean? Nothing!

The key is what happens if you're wrong (if the trade isn't yet active then you lose nothing with my methods).  If you get knocked out after your first profit then by then you've ring-fenced your position so you're still in profit.

If the stock falsely breaks out and then retraces, then ok, you'd make a small but controlled loss - as you may with any other trading systems.


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