How Do We Compute our Risk/Reward Ratio?
#31
Thank you bro ninja for a very informative inputs... +1 rep for you at pakopya sa style ha Big Grin
====================================
Get a Daily Stock Guide with
TheDailyHINT plus FREE Stock reports here!
Reply
#32
(08-18-2012, 11:52 AM)INDO Wrote: Thank you bro ninja for a very informative inputs... +1 rep for you at pakopya sa style ha Big Grin

You are welcome Bro Indo and Xandman. My trading style is not patented so if you find it good, then by all means copy it. However, I suggest that after applying it for a while, start tweaking, adding, revising and then call it Indotrading or Xandmantrading.

The idea is to adapt so that it suits your trading style and make it your own. As Bruce Lee stated, "Absorb what is useful, Reject what is Useless and Add what is specifically your own." (N.B. I think Bruce Lee also adapted the first two phrases from the Filipino saying "Pulutin ang mabuti, ang masama ay iwaksi" then he added "Add what is specifically your own.")
RESPONSIBLE TRADING, my Advocacy, means Practicing Self Discipline, Continuously Educating Yourself, Protecting your Capital at all Times and Taking Full Responsibility for your Trading Results.

MY TRADING PHILOSOPHY:
TRADING without FEAR, TRADING without GREED. GREED causes exposure to DANGER. FEAR causes missed OPPORTUNITIES.

MY TRADING RULES:
1. PROTECT YOUR CAPITAL at ALL TIMES. 2. TRADE to TRADE WELL not only for MONEY.
Reply
#33
thank you bro ninja... sa ngayon pa lang pwede ko ng tawaging indotrading kaso di pa ako proud, wala pa kasing tumpak na analysis, puro tsamba kaya medyo nabawasan na ang kita Big Grin
====================================
Get a Daily Stock Guide with
TheDailyHINT plus FREE Stock reports here!
Reply
#34
how do you guys estimate your target price pala or yung target reward nyo? Pag galing cya sa bottom parang obvious ang next resistances because titingnan mo lang yung previous highs but what if you are looking at a chart that is making new highs, how do you set your targets? targets that justify as a considerable or reasonable price.

Always a Newbie
Reply
#35
Bro Xandman,

Quote ko lang yung final step sa trading system ko.

"3. Final step. Do a reality check if your target price is attainable. Check if stock has not yet reached the level of your target price in the past, stock is already in the end of the uptrend, or in 5th wave. The more these conditions are present, the less probability of attaining your goal. "

Consistent pa rin ako sa ratios ko. I used to buy breakouts and chase prices but I do not do it anymore dahil dito ako madalas dati maipit. I have learned to be patient and wait for either pullbacks and bounce after hitting support, beginning of a trend, or start of a 3rd wave. This ensures that I am not buying at the highs.

In addition to the above, I observe a 30-minute breakout rule. Although may trading plan na ako, pinagmamasdan ko yung price movement ng stock for 30 minutes. Consistent ba ang volume? Minsan malaki yung bid side biglang nawawala.

Ang requirement ko minimum trade of at least 100 times per day. So since we have 4.5 trading hours (2.5 hours in the morning, 2 hours in the afternoon) dapat in 30 minutes, stock should have traded at least 11 times (100 trades divided by 4.5 trading hours equals 22 for one hour so 11 for 1/2 hour or 30 minutes)

Again these are not cast in stone. Adapt, apply and revise so that it suits your trading style.

Goodluck in all your trades.
RESPONSIBLE TRADING, my Advocacy, means Practicing Self Discipline, Continuously Educating Yourself, Protecting your Capital at all Times and Taking Full Responsibility for your Trading Results.

MY TRADING PHILOSOPHY:
TRADING without FEAR, TRADING without GREED. GREED causes exposure to DANGER. FEAR causes missed OPPORTUNITIES.

MY TRADING RULES:
1. PROTECT YOUR CAPITAL at ALL TIMES. 2. TRADE to TRADE WELL not only for MONEY.
Reply
#36
(08-18-2012, 06:23 AM)ninjatrader919 Wrote: Thanks Bro Indo. Baka tinangay na ng baha ulitin ko na lang tapos dagdagan ko pa.

For Admin, this supersedes my previous post. Kung nasa freezer pa, paki-delete na lang.

Tama lahat yung mga sinabi nila, I just want to share my own:

Assuming you have already established your entry point, i.e., price is already within your Target Action Zone, this is my procedure:

Assumed Data:
Price of Stock: P20.00
Risk Tolerance: 2%

1. Since my risk tolerance is 2% or P0.40 (P20.00 x 4%), my stop loss is P19.60 (P20.00 less risk of P0.40)

2. My risk/reward ratio is situational. This is what I call Ninjatrading or Nimble Situational Trading. In making an investment the general rule is the higher the risk, the higher the return. Also, the longer the holding period, the higher the risk.

a. For Scalping Trades or Super Tsupit (holding period 2 to 4 hours)
Risk reward ratio 1:2
I am risking P0.40 so my reward should be P0.40 x 2 or P0.80
adding this to my buying price of P20.00 my target price is P20.80
so I could at least cover all my transactions costs plus a
reasonable gain.

b Repeat the same process but different ratios for each kind of trade

Daytrading (holding period 1 day) Risk reward ratio 1:3
Swing Trading (holding period 2 days to a week) Risk reward ratio 1:4
Position trading (holding period 1 week to a month) Risk reward ratio 1:5
Investment (holding period more than 1 month) Risk reward ratio 1:6 or more.

3. Final step. Do a reality check if your target price is attainable. Check if stock has not yet reached the level of your target price in the past, stock is already in the end of the uptrend, or in 5th wave. The more these conditions are present, the less probability of attaining your goal.


Very interesting...

I will try these techniques Smile
Reply
#37
(08-16-2012, 07:12 AM)ninjatrader919 Wrote: Palabasin ang post!ninja

...sorry ninja ha? busy admins lang eh Big Grin actually cramming at nangangatog sila ngayun para bukas hehehe, me included

...nadelete na yung previous post...carry on na Smile



Reply
#38
(08-30-2012, 11:06 PM)Ollie Wrote:
(08-16-2012, 07:12 AM)ninjatrader919 Wrote: Palabasin ang post!ninja

...sorry ninja ha? busy admins lang eh Big Grin actually cramming at nangangatog sila ngayun para bukas hehehe, me included

...nadelete na yung previous post...carry on na Smile

Comm Ollie,

Thanks. Goodluck to all of you sa exams nyo bukas.

RESPONSIBLE TRADING, my Advocacy, means Practicing Self Discipline, Continuously Educating Yourself, Protecting your Capital at all Times and Taking Full Responsibility for your Trading Results.

MY TRADING PHILOSOPHY:
TRADING without FEAR, TRADING without GREED. GREED causes exposure to DANGER. FEAR causes missed OPPORTUNITIES.

MY TRADING RULES:
1. PROTECT YOUR CAPITAL at ALL TIMES. 2. TRADE to TRADE WELL not only for MONEY.
Reply


Forum Jump:


Users browsing this thread: 1 Guest(s)