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You mention several times to seek 1:2 R:R ratio in our trades. I completely understand the motive behind it, and there is no doubt that this is the way to go.
However, I see two problems with this idea.
One, that no matter what reward level we seek, it enforces nothing on the price. We can seek just anything - I would love to have 1:10 R:R ratio in my trades. But 1:2 or 1:10, the setting might not even come to play. The fact is that Price does not have to respect it and can just turn back anytime. So how does this decision even matter?
Two, on occasions when price does make it to this reward level, that is the only time when this decision gets a chance to help, if anything. In those cases, again, price can continue to move on when we only took 1% of the trade.
Even if we exempt the second problem since it gives us something, I see a fundamental problem with the first part.
Can you comment on it?
Thanks,
Jaspreet.
Last edited by JForex; 08-17-2009 at 10:09 AM..
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