I've noticed in many threads on this site and many others, many people are inclined to focus their research on creating TA systems that have high win-to-lose ratios (what I'll call'% Success'). Although the topic of the value of money management was discussed, it seems to be discussed much less than it ought to be.

Keeping this in mind, I chose to do a small study of various risk-to-reward ratios according to a single TA system - a relatively simple daily breakout egy. Whether you would employ this trading egy yourself isn't especially crucial in terms of the final decisions that the study produces. Obviously R/R is only 1 component of money management... but it's a pretty major chunk of it.

Simply put, the obvious conclusion that came out of the study is that:

Risk/Reward ratios easily outstrip percent Success in generating profits from trading systems.

Obviously, this isn't any new fact to experienced and edued traders. My expectation is that by showing the results of the study, those relatively new to trading will learn it is crucial to develop a better understanding of money management and R/R prior to investing in a lot of time seeking to create a trading system of the own (or even to employ anyone else, for that matter).

I'll explain the specific method I used, just how it was back-tested, etc., in the following posts... There is a fair quantity of info to be discussed here, and I would rather break it into chunks than have one massive post.

I've attached an excel file to this article that introduces the resultant data, wrapped in a zip (see below). There should not be any macros or such, though there are many charts of data, and I'm not sure if those employ macros or not. Reagrdless, I do believe my local method to be virus-free, so hopefully we don't need to be somewhat concerned about such issues.

Sheet 1 shows all the actual data that has been created, and Sheet 2 has a presentation of all the graphs of the data, laid out for contrast. In the far right of Sheet 2 there are some summary notes for each R/R group.

I expect we can all benefit from this work, and I look forward to learning more about this topic from those who know more than me. And please, let us keep the thread clean, be respectful and respectable, and also possess an eduional, edued conversation.
https://www.nigeriaforextrading.com/...4649746068.zip