How to Improve Your Risk to Reward on Every Trade?
Let me ask you…
Do you want to improve your risk to reward on every trade?
Do you want to increase your winning rate?
Do you hate to get stopped out prematurely?
If you answered yes to any of it… then today’s lesson is for you.
You’ll learn a little-known “trick” I wished someone had taught me in my early days of trading (so I can save a ton of money and heartache).
If you’re ready, go watch today’s training lesson below:
Once you’ve had a chance to watch, I’d love to know…
Have you tried this simple “trick” before, and what were your results with it?
Lovely….Learnt something from todays lesson. Trust me you’re doing a great job.
Hey Tim,
Thank you for your kind words, I appreciate it.
Rayner
Hi Rayner,
Thanks for sharing this educational video. Though i have been trading with my own system but i will be keen to get into your mentor-ship program sooner or later.
Currently i am only trading the US stocks / equities and is looking into other fields like currency pairs and futures. I read trend following works pretty well in these markets. Sadly, I will have to say trend following generally dont work so well in bear markets for stocks. Short selling stocks at bear markets is not as easy as it seems, so i am probably looking for other alternative fields to practice my trend following strategy and hope to keep a consistent record in both good and bad times.
As i saw most of your post and videos are focusing on currency pairs, so i assume you must be really good at this and probably someone i can learn from in future.
Anyway, i am just curious who inspired you the most in coming up with your own trend following system or you just manage to figure it up yourself that it works the best for you?
For more books on trend following and strategies in currency and futures, which books or traders will you recommend?
Look forward to your reply . Have a nice day and cheers =)
Hi Kayson,
Yes you’re right, most trend followers who trade stocks only do so from the long side.
I do trade metals, energy, indices as well.
I learnt a lot from the turtle traders, and michael covel books. Most of them take a systematic approach to trend following, but I’m far more comfortable with my own discretionary approach.
You can check out the list of my recommended books here.
Cheers
Rayner
Hi Rayner,
Excellent Lesson!
The only negative point is that, in this way, often the momentum is unfavorable.
Usually I apply some filters: avoid “blind entry” and wait for a signal to enter with favorable momentum near the support / resistance area.
Signal like a pinbar, inside bar, 2-bar reversal pattern (small, because the price should not be too far from the key area).
Or, without waiting candlesticks pattern, placing Stop Order not far from the Key Area. So I have a good risk:reward ratio and favorable momentum (and if the price continues to the opposite direction, the order is not executed).
Rayner, what do you think about this?
Thank You Very Much!
Marco
Hi Marco,
You share some very good pointers.
There’s basically 2 ways about it…
1) To place a limit order ahead of time
2) To wait for “confirmation” ‘like a candlestick pattern.
I don’t think there’s right or wrong way to go about it. Its what suits you best.
Sometimes if the trend is really strong, a limit order would be best.
And sometimes if momentum if very strong against you, waiting for a confirmation like pinbar, false breakout etc could work as well.
Rayner
Excellent work. Tremendous help. Thanks!
Glad to be of help, Jim.
Don’t hesitate to let me know if you’ve got any questions, I’ll be glad to help.
Rayner
Very useful.
Thanks.
You’re welcome, Juan.
Don’t hesitate to let me know if you’ve got any questions, I’ll be glad to help.
Rayner
Hi rayner,
Thanks for the lesson, I agree with you that risk management is important
I wrote a guide for that reason in my website
Take a look on it
http://investoune.com/forex-risk-management
Thank you for sharing, Hamzeh.
Hi Rayner
thankyou for all the great content but what’s your opinion on using leverage (not to hedge). And what’s your opinion on hedging?
Thanks, keep up the great work.
Luke
Hi Luke,
Leverage don’t really affect me much because each trade I put on is 1% of my equity. So a 1 to 50 leverage is usually more than enough for me.
I don’t hedge positions but simply cut them off.
Rayner
Hi Rayner,
Very easy to understand and extremely useful for novice traders.
Do you wait for price action or enters once it hits the desired location?
If no, please share us the thought process on your entry requirements.
Please keep it up.
Thanks
Sacheen
Hi Sacheen,
Sometimes I don’t sometimes I do.
But a more conservative approach is to wait for price rejection before taking a trade, or what its known as a false breakout.
Rayner
Hi Rayner,
I’ve been watching your videos and I am wondering say for eg. it’s an uptrend, you’ve missed the boat for a long cos it has gone too far. would you then short right now, thinking that it will have to drop to your 20/50ema in a matter of time
Thanks!
Hi April,
No I won’t short. Instead I’ll look for it to pullback towards the 20 & 50 EMA once again.
Rayner
Thank you Rayner!!
I wish one day to shake your hand 🙂
I really love your style Ray. It’s always give me hope to push myself forward, step by step, and build my way on a firm ground. Yes.. trading is hard, but not hard enough that human being can’t face it.. most of the people around me think it’s just like a hobby in my free time.. my dad sometime say to me “you won’t eat from trading” and my mom think that I spend too much time on it… It’s sad to feel alone and to face with it every day only I and my computer.. it’s really hard.. sometimes I think that I’m crazy, because no one around me like me and no one interested in trading, economic and financial markets, and don’t even have a one friend to talk and share with him.. But I feel, for me, it’s worth dying to succeed in trading. I know deep inside me, if I leave it, I’ll fail forever, because if I still try and don’t give up, I still have a hope, but if I leave, I’ll fail forever, and life is worth more when you riding to your dreams. For now it’s too much black around me, but I make an effort to see the white dots, I try to define a way, to focus on the important things, control my thought and to see myself as a one who gets success in trading… step by step, not all the work in a one day… the journey is already too long for now, but I have to be happy that I have a journey and I have head, feet and hands to do it.
Wish you love, hope and faith, peace & happiness.
Shlomi
Hey Shlomi,
I know how you’re feeling my friend.
It’s lonely when no one seems to understand how you feel or think.
But hey, that’s what TradingwithRayner is here for. A community for like-minded traders to hang out, and support one another.
Don’t hesitate to let me know if there’s anything, I’ll be glad to help.
Rayner
Thank you Ray for your caring.
I must say.. your blog is the only place on the web I write and share something about me.. your blog doing is purpose well.. I was amazed by myself when I wrote all this above. The answer is, probably, I feel good to share it, because I feel someone with kind heart here.. have blessed!
Shlomi
Hi Shlomi,
I’m glad to lend a listening ear, feel free to voice out if there’s anything bugging you.
Rayner
Hey shlomi,i know it’s years past but i feel same way rn with everyone around thinking I’m crazy cuz i spend much time trying to develop my trading skills everyday. I’m sure you’re a profitable trader by now,cheers.
Ooak
hi ray u r doig grt job helpg ppl wd ur honest guidnce. keep up d gud wrk. keep blossmg. jus wanu knw 200sma is more imp or 200ema in long trm trend n same qustn fr 20sma or 20 ema fr shrt trm trend. thx. god bless all .
Hi Mandeep,
I use EMA but honestly it’s not going to make much of a difference.
Rayner
k thx fr respondg ray, also can u tel me in wekly charts or monthly charts. which sma 20 or 200 etc / ema 5, 20, 200 etc to luk fr suprt n restnce or u use. thx. god bls.
Hi Mandeep,
I use 20 & 50 EMA across all my charts.
Rayner
Rayner,
This is one of the best video to understand the importance of risk-reward. You are doing a job and keep up the good work.
Thank you, Indra.
Glad to hear that!
I now know why I get stopped and trader goes my way.
Keep up the good work
Glad to hear that, Senzo.
Cheers
Hi Rayner!!
Thanks a lot, for your contribution. I have a little question: Do you have any way of measuring risk?
Best!
I measure risk based on how much capital I’ll lose if a trade hits my stop loss.
Thanks for this insightful lesson, Rayner. I look towards practicing them. I’m learning a lot and it could be all confusing. But I know I’ll get it right. Thanks again.
You’re welcome, Samuel!
The video is already missing in this blog post. please upload it again if you had a chance.