I’ve bought little expertise briefly time period buying and selling, I didn’t file all of the trades I took, I didn’t keep any ledger, so I can’t probably say if I had been worthwhile or not. Additionally, even I had been worthwhile there was no robust technique, no explicit course of, could also be I simply glided by lower than elementary issues.
Of late I’ve began to take a look at swing buying and selling, brief time period buying and selling once more, this time with a greater course of, with some parameters as methods, and the outcomes have been good. I suppose if I carry on doing this for someday, the outcome might be even higher.
However I want some recommendation as to the danger reward ratio and cease loss. I’m not grasping, so I’ll ebook revenue as per my predefined %, additionally these are trades for very brief time period, so I don’t thoughts even when the worth doubles after reserving my revenue, as a result of if my methods get higher, I might be discovering extra shares which can give me my revenue. My uncertainty is with the danger reward ratio and cease loss. Say if 5% is my revenue, what’s the ultimate or the widely adopted threat % and cease loss.
Is threat reward ratio of two alright, say I ebook 5% revenue, and I’ll promote at 10% loss. Is all this subjective or some common quantity is adopted, at the least as a thumb rule, like a shifting common?
I do know that if I get 2 10% losses, that basically means my 4 worthwhile 5% trades are to be written off, and if I took 6 trades, 4 revenue and 4 loss, it means I simply broke even.
I do know that threat reward ratio of 1:2 sounds good, but when my revenue % is small, say 5%, then I ought to promote at 2.5% loss, however a 2.5% transfer within the worth may be very small motion in a day. And I cannot improve my revenue %, whether it is 5%, I’ll promote if I get that, I cannot look forward to 1% extra, so I double the danger proportion.
So any ideas, inputs, recommendation?