Same strategy. 4 options on how to manage trades.
Can use anything from a really tight stop and win very often but small to a very wide one and rarely win but win big.
Which method really makes the most money?
Let's look at the numbers after 100 trades:
Strat 1 with a ridiculous winrate and profit factor
=> 1 RR 95 Wins 5 Losses => Get 90R out!
Strat 2 with...
Intro, you can skip this part but I think it would be interesting for you to take a quick look:
Statistics estimates and formulas? Trading is mostly about emotions, not statistics estimates and formulas.
Most people do not need all of those formulas, they don't need to make plenty of stats and estimates, but just focus on discipline and emotion control.
I got...
I already posted that the average trader at a big broker (FXCM) had a negative expectancy. Their risk rewards are around 0.5-0.6 with winrates of ~ 60%. This means for each dollar they make they lose 1.22. Their Profit Factor is ~ 0.82.
4 lose 6 wins each win is $30 each lose is $55 ==> Profits = 180 Losses = 220.
So this explains why the average loses. But not...
