On the other hand, if you allow yourself to be consumed by greed and trade with let's say a risk of 20 % per trade, force the system to trade with negative risk /
reward ratio because you want to have a win rate of 99 %, you will not have much success with the Forex Force system or any other automated trading system.
I say that because I get a lot of emails from traders telling me they can't get a proper 1:2 or more risk
reward ratio because there are too many support or resistance levels in the way.
I say that because I get a lot of emails from traders telling me they can't get a proper 1:2 or more risk
reward ratio because there are too many support or resistance levels in the way.
Not exact matches
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.
You must devise a trading strategy that exhibits a minimum risk - to -
reward ratio of 1 to 2
because you need to cater for inescapable losses as a basic component of your trading plans.
So it's a situation with a bit of hair, but I also think that this is a deal that is almost certain to be completed, and
because of that it's still a bet with an attractive risk /
reward ratio.
Many (if not most) people would take cover instead of taking the risk
because the risk /
reward ratio isn't worthwhile.
The benefit of this technique is that it's a more conservative approach (
because price is already established above the neckline) that often leads to a good
reward to risk
ratio, especially with descending necklines (see the image above).
The reason I don't trade the standard double bottom technique anymore is
because the
reward to risk
ratio is not good enough.
If you had a predefined profit target set at a 1:2 or 1:3 risk
reward ratio, but as price gets close to that target you move it further away
because you «think» price will keep going for an even bigger gain... that is greed, and it will almost always result in you making LESS than you would have if you just exited at your predetermined profit target.
I like it
because you give yourself a better risk to
reward ratio when it happens.
Those same scalping systems would not work if you adjusted the
reward to risk
ratio much higher
because scalping setups typically have very little follow through.
The reason your risk to
reward ratio is so important in trading is
because with a 1:1
ratio and a 50 % strike rate (win rate), you would break even.
With travel
rewards, you never really know how much you're getting
because they can always change the redemption
ratio at a time when you are not ready to redeem all your points.
Your actual
reward to risk
ratio can vary
because some traders (like myself) move their stop loss to break even, and we also exit early at times depending on upcoming news events or market hours.
However, even with a 1:1 transfer
ratio, this is rarely a good use of Ultimate
Rewards because Marriott award stays cost so many points.
It is not worth trading
because the distance the market is moving between reversals is not big enough to allow for a good risk
reward ratio.
You can also transfer Chase Ultimate
Rewards to Ritz - Carlton (Marriott) at a 1:1
ratio, but
because of redemption rates for award stays, you're better off using Chase points elsewhere (or just to top off your Ritz - Carlton account).
Because Membership
Rewards points transfer to Delta SkyMiles ® at a
ratio of 1:1, you don't lose any value from your points.
This technique also works better with steep trends
because the
reward to risk
ratio tends to be better.
This next Forex double top strategy is my favorite technique
because it typically provides excellent
reward to risk
ratios.
This is
because it earns Chase Ultimate
Rewards points, which have a 1:1 transfer
ratio to a number of top airline and hotel programs.
Many traders get caught up on losing 2 or 3 trades in a row
because they fail to understand the full implications and practical application of risk
reward ratios that take time to play out.
This is
because it improves the risk -
reward ratio of the investment by reducing risk and improving the chances of making a greater profit when, ultimately, the market recognizes the true worth of the share.
Because Chase Ultimate
Rewards points transfer at a 1:1
ratio to Hyatt, you would need a combined total of at least 75,000 Chase Ultimate
Rewards points and Hyatt points.
Because Chase Ultimate
Rewards points transfer to United Airlines at a
ratio of 1:1.
Because of the 5:4 transfer
ratio, you could convert 125,000 AMEX Membership
Rewards points to 100,000 JetBlue points.
And
because you can transfer points between Iberia and British Airways, this is a good way to convert your AMEX Membership
Rewards points to British Airways at a more favorable
ratio.
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).
We're also huge fans of collecting Membership
Rewards points
because the transfer to most airlines is instant and at a 1:1
ratio.
You can transfer Ultimate
Rewards to IHG at a 1:1
ratio, and you can often earn Ultimate
Rewards faster
because of bonus categories.
Because Southwest is a travel partner with Chase and their awesome travel
rewards credit cards, you can transfer your Chase points (which you accumulate through everyday purchases) at a 1:1 ratio to your Southwest Rapid Rewards p
rewards credit cards, you can transfer your Chase points (which you accumulate through everyday purchases) at a 1:1
ratio to your Southwest Rapid
Rewards p
Rewards program.
The transfer
ratio from Membership
Rewards to Starwood isn't great — 3 Membership
Rewards points per Starpoint — but
because of the high value of Starpoints, you can still find reasonable value in the trade — around 0.74 cents per point on average.
Club Premier miles on their own are average in value, but
because the transfer
ratio is favorable — 1.6 Club Premier miles for each Membership
Rewards point — transferring Membership
Rewards points to AeroMexico is actually a decent value.
The reason why I like Starpoints quite as much as I do is
because they're so incredibly versatile — they can be transferred into to just about every major airline
rewards program out there (35 in total) and, in most cases, they transfer over at a
ratio of 1 Starpoint to 1 airline mile.
The reason why Marriott Flight and Hotel packages are often cited as a great use of Marriott
Rewards points is
because, essentially, they allow you to purchase airline miles at a
ratio of 1 Marriott
Rewards point to 1 airline mile / point... and that's a very good exchange rate.
Because Membership
Rewards points transfer to SPG at a 3:1
ratio.
Because Membership
Rewards points transfer to Delta SkyMiles ® at a
ratio of 1:1, you don't lose any value from your points.
You can also transfer Chase Ultimate
Rewards to Ritz - Carlton (Marriott) at a 1:1
ratio, but
because of redemption rates for award stays, you're better off using Chase points elsewhere (or just to top off your Ritz - Carlton account).
Effectively, that means you earn 1 % cash back
because you get 2X miles on all purchases and the
ratio is 2:1 for cash back
rewards.
But it's hard to take that claim seriously
because if that's the case then you'd think they would make the transfer
ratio even out the discrepancy in value between the two
reward program currencies.
Firstly, it is extremely unwise to use Membership
Rewards to redeem cash back
because you get a 1 - point - per -0.5-cent
ratio.
I especially love the hotel partners like Hyatt,
because the transfer
ratio is awesome — just 30,000 Ultimate
Rewards points can get you a night in a top - tier Hyatt property that could easily cost well over $ 1,000 per night in hot destinations such as the Maldives or Paris.
The addition of Atlantis is significant
because you'll be able to earn and redeem Marriott points for stays at the mega resort, which is a big plus for anyone with Marriott and Ritz - Carlton points or Chase Ultimate
Rewards (for Sapphire Preferred, Ink Bold and Ink Plus cardholders) that transfer to Marriott and Ritz - Carlton at 1:1
ratio.
It's relatively easy to collect a substantial amount of British Airways Avios
because you can transfer from both Chase Ultimate
Rewards and American Express Membership
Rewards at a 1:1
ratio to your British Airways Executive Club account.
Membership
Rewards points are extremely valuable
because they can be transferred to a large number of partners, often times at a 1:1
ratio.