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TFC Commodity Trading Forum

Re: A question about risk:reward ratio

Thanks for explaining; I don't use backtesting these days, if I do it is manual (custom charts). One thing is certain, in live trading you have more 'hidden' risky parameters; for example, you tested a system, 15m frame using stochastics; the amount of crossing (fast vs. slow) in live trading is much higher than the historical data (whip saw effect).
1) In live trading you taking more risk so you need to plan to gain more. The give numbers 68%, ..are better profitable in binary options trading than ES-trading.
2) For given trading hours, there may be one or two low-risk entries, if you miss it, every other entry is more risky; your system, let alone profiting, may not be able to breakeven.
So keeping at least the 68%, you need at least a reward of $1.50 for every $1 risked (more risky parameters in live trading!).
GL.
J.