Sunday, May 19

risk reward analysis

Many traders I have interacted with every first question comes up "Bramesh What is Risk to Reward Ratio your system gives, I ask what is your expectation most of amateur will answer at least 80%." I just smile and try to explain the why traders looks for such rosy percentage.  We just need to understand the basic maths behind trading.
Most of professional traders are likely to lose atleast 35-35% of their trades and some even 60% of time. But still they make money, How is this possible. Let me elaborate with the same in remaining part of article.
Before you start trading make sure you and your mind understand losing is part of trading and losses will be there. So do not ge disheartened when you see losses..

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