Well, depending on how you see it, winning in the forex market is predicated on the strategy that The win rate of the trading strategy- is it 40%, 65% or what? The best time frame where it can be trades- Does it work on higher time frames or.
Table of contents
- 7 Essential Forex Strategies for Achieving Consistent Profits
- Reward Risk Ratio Myths
- 23 Best 🥇Forex Trading Strategies and Tips Revealed by Pro's ()
If we break the rules, will we lose money? Watch this. I tested the Beep Boop Trading strategy times with a 0. So in case you lose one trade, and then make a profit in the next trade, your total profit will be positive, because your second trade covered the loss of the previous trade, and still had some money left over.
So why does everyone recommend using a higher reward to risk ratio? Well, the answer is pretty easy. Is during the trending market.
7 Essential Forex Strategies for Achieving Consistent Profits
But since profit is always less than your loss, you will have a high chance of making a loss in the long run. Now lets say, you take more profit than your risk, lets say 2 to 1. In the trending market, you win almost same number of random trades as you did with a lower reward risk ratio, but this time, because you were booking double profits, the random trades that were in the direction of the trend, made a lot more profit than the same trades achieved last time with the lower reward risk ratio.
If you calculate the total profit of these two scenarios, you will see that the second scenario where reward risk ratio was higher than one, made a profit. Obviously, taking random trades is probably not going to make you a profit in the long run even with a high reward risk ratio. But what a good reward risk ratio can do is stop you from blowing up your account quickly even if you take random trades.
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And if you use a profitable trading strategy in a trending market, and have enough experience to identify and avoid the sideways market, you can make more money with a higher reward risk ratio. What do you do then?
Reward Risk Ratio Myths
According to the theory we discussed in these two scenarios, trade with a lower reward risk ratio has a higher chance of making money in the sideways market. So what if? What if we create a trading strategy, that will follow the trend direction, and will have a lower reward risk ratio like 0. Since I already created a profitable trend trading strategy in the beep boop indicator video, I tested the same strategy times with a 0.
And in the end, it got the highest win rate we have gotten on the Trading Rush Channel ever. In the Trading Rush App, it got a win rate of approximately 71 percent. Now obviously the high win rate is because the win rate goes up if the reward risk ratio goes down.
Look at the profit graph and the number of winners and losers. The account size was , and it made a profit of less than 10 percent. If we compare it with the previous results we got in the last beep boop video with a 1. This time, the strategy only gave 3 losers in a row, and gave 14 winners in a row.
23 Best 🥇Forex Trading Strategies and Tips Revealed by Pro's ()
Even though we took less profit than the risk, the end result with the beep boop trading strategy was profitable, but not good enough like the result we got with the 1. Now remember, I created the Beep Boop indicator to follow the strong trends. Furthermore, the beep boop indicator gives multiple good entry signals in a single trend.
Is this common in the demo-world or am I really gonna be a real forex god as soon as I go live? The FX market has made huge moves recently which favor moving average crossover systems. You might want to move to a real money account first before making claims of being a forex god though. I think 45 days is far too early to judge your performance. The next 45 days may be 5 losses in a row - such is the way the markets work. I personally advise a year of demo trading before going to real cash. Well, I hope you are ready to move on to real account and experience your first real trading journey then!
Have a large sample size of trades first then calculate your market expectancy from that large sample size.
That will tell you if your strategy has a high probability of winning for each trade. Do that before you go live. That would mean demo trading for at least 90 days. And please do watch your emotions. This could make you not to become overconfident and you start making errors in trading.