#ForexChief #winrate #trading #forexschool #forexeducation #StopLoss #TakeProfit⠀
💲 Is StopLoss greater than TakeProfit? Quite possible!⠀
💡 The technical analysis from classic books requires that TakeProfit be at least 3 times greater than StopLoss. Newbies usually do the opposite: they put TakeProfit closer and StopLoss - farther. But even with such “wrong” management, some people still make money.
⠀
Even if you count on an average profit, a rather distant StopLoss allows you to calmly wait out the “market noise” and technical rollbacks. In order to consistently remain profitable, your trade must have a positive mathematical expectation - usually this situation is called a trading advantage.
⠀
The curious people may look for the calculation formula, but we prefer a more descriptive form. Take a look at the table.
⠀
It all depends on how reliable and profitable the strategy is and what percentage of profitable trades it has. The poker term
Winrate is used for this “success” indicator.
⠀
If the strategy gives only 20% of profitable trades, then for a trading advantage you need to keep the Profit/Risk ratio at the level of 5:1 or more. With 50% of profitable trades, a TakeProfit/StopLoss ratio of 2:1 is sufficient. But for
Winrate systems, StopLoss may even be over 60% higher than TakeProfit.
⠀
So trade on profitable strategies and then you will not be afraid of any StopLoss!
⠀
Profits to y'all!