Net breakdown (contracts traded):
ZS -$321(4), GCL $702(4)
ZS -$321(4), GCL $702(4)
| RESULTS FOR DAY | |
|---|---|
| Contracts: | 8 |
| Net $P/L: | 382 |
| Wins: | 1 |
| Losses: | 2 |
| Win%: | 33 |
| Avg$Win: | 702 |
| Avg$Loss: | -160 |
Risk:Reward ratios are all the talk on trading sites and blogs. I agree they are good to look at but they aren't what makes you profitable (IMHO). Take my ZS trades this month so far, 7 winners, 16 losers or 30% win rate. Total net gain on winners was $2203, total net loss on losers was -$2514 (so I'm down on month on ZS). I risk 1.5 cents and my reward is 4 cents (both fixed). Although I haven't specifically looked at each trade, I'd be willing to bet that if my risk had been 4 cents for a reward of 1.5 cents, my win% would be ~70% and I'd still be net the same dollars month to date. Bottom line, don't be fooled into thinking you can be profitable by simply targeting a better risk:reward ratio. It ain't that simple.
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Risk:reward is a function of the empirical distribution of your PnL, not so much a function of short-run samples where there's a ratio of potential gain to potential loss.
ReplyDeleteWe can discuss this in more detail on my blog.