Long and short position (risk/reward)

الفكرة بكلمات بسيطة

Before a trade, decide where you are wrong (stop) and where you take profit (target). If the possible gain is at least twice the possible loss, you can be wrong more often than right and still come out ahead over many trades.

طريقة الحساب

Click the entry. Drag the target and stop handles to your levels and the right edge to your time horizon.

Risk = |entry − stop|
Reward = |target − entry|
Risk/reward = 1 : (reward ÷ risk)

كيفية الاستخدام

• Look for setups with reward at least 2× the risk.
• Work out position size from the risk: money you accept to lose ÷ risk per unit.

استخلاص النتائج

• A 1 : 3 trade needs to win only a little over one time in four to break even (ignoring costs).

ما يجب الانتباه إليه

• The plan is only as good as your discipline in following it.
• Costs (spread, commissions) reduce the real reward.

لمحة تاريخية

Risk/reward planning is a basic rule of trading risk management.