Showing posts with label trading tuesday. Show all posts
Showing posts with label trading tuesday. Show all posts
Tuesday, 2 July 2019
Traders Tuesday!
This is a great video on developing your own trading strategies. Trading strategies can be based on indicators with a strict set of rules, or newer strategies such as mechanical strategies, which take human interpretation out of trading.
Later this week I’ll be sharing my personal excel sheet that I use for backtesting and to record live trades (which a short webinar on how to use it). Safe trading!
Let me get it out of the way: the winrate in trading it completely irrelevant on its own. Many traders put way too much emphasis on the winrate and do not understand that a winrate does not tell you anything about the quality of a system or a trader.
You can lose money with a 80% or even with a 90% winrate if your few losers are so big that they wipe out your winners. On the other hand, you can have a profitable system even with a winrate of 50%, 40% or onl 30% if you are good at letting winners run and cutting losses short.
It all comes down to your reward risk ratio.
The reward to risk ratio (RRR, or reward risk ratio) is maybe the most important metric in trading and a trader who understands the RRR can improve his chances of becoming profitable.
