Long and short position (risk/reward)

用通俗的话解释

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.

计算方法

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)

如何使用

• 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.

得出结论

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

注意事项

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

一点历史

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