If you look at the equity curve you can see that two things: 1) When the market became completely chaotic the system lost more trades than usual but it never resulted in a huge draw down because of
the favorable risk reward ratio of 1:4 (or better).
Not exact matches
As always, patience to wait for proper trade entry points with
favorable reward -
risk ratios is important, so we are not interested in chasing ETFs just for the sake of action.
However, yesterday's price action in EEM now makes our
reward to
risk ratio even more
favorable for -LSB-...]
Further, because this is a Pullback Buy setup, the
reward to
risk ratio of the trade setup is
favorable.
However, yesterday's price action in EEM now makes our
reward to
risk ratio even more
favorable for buy entry because the ETF gapped lower on the open, then reversed to close at its intraday high.
While stock investors consider diversification across different investments as the strategy for minimizing potential losses, gamblers look into the
risk capital to
risk reward ratio and would only put in their money if the odds are
favorable.
So, the
risk -
reward ratio may not be
favorable for investing in Gold.
There's a reason why I recommend a
favorable risk to
reward ratio.
I always take a small position though: unfortunately the mechanics of short selling are such that the
risk /
reward ratio is not as
favorable as taking a long position.
This retracement helped offset the
risk to some degree by allowing us to secure a
favorable risk to
reward ratio.
Of course, things like momentum and
favorable risk to
reward ratios come into play.
I also favor the 50 % entry method for its
favorable risk - to -
reward ratio.
You certainly could have done that and still maintained a
favorable risk to
reward ratio.
I will continue to favor the 50 % entry method for its more
favorable risk - to -
reward ratio.
It offers a more
favorable risk - to -
reward ratio, sometimes doubling the potential profit of a setup.
The first is to always use a
favorable risk to
reward ratio.
Both signals above offered incredibly
favorable risk to
reward ratios.
You can do this through the use of price action strategies, a
favorable risk to
reward ratio as well as trading with the momentum.
By always maintain a
favorable risk to
reward ratio and staying patient, you can have a win rate as low as 50 % or even 40 % during some months and still make money.
That seems like a
favorable risk:
reward ratio to us.