RISK REWARD RATIO - Trade like a professional.

Risk Reward is arguably the most important aspect of a stock traders strategy. To trade like a professional you must fully understand the function of the risk reward ratio.

In this video we explain how the risk reward factor can be skewed in the favour of a trader, and by doing so the trading returns can be amplified.

Return On Risk is the real metric to determine the viability of a trading strategy, and the risk reward ratio enables the trader to do just that.

You will see how such a small increase of risk can have such a huge impact on trading returns.

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As a professional trader I have consumed hundreds of financial books and endured countless hours of self education. My hope is that this channel will reduce the learning curve duration of many aspiring traders by providing the key information in a concise and enjoyable manner.

[NHill-dgch]

This channel was the missing puzzle for me. Thank you for sharing your experience with people

[rajdeshmukh]

Sir, probability is also is important R:R 1:2.25 has 25℅ probability of hitting target and R:R 1:1.33 has 40% probability of hitting target.

[TeganHoney]

Thanks for sharing. So my take away from this video is having an almost full proof set up. I’ve watched many trader videos and a lot of them screen for consolidations and breakouts, but entry for their trades vary using a combination of technical analysis. I am current working on better entry/timing. I am going to create a spreadsheet to help me managing risk after watching your video and seeing how a small breakout can make a huge difference.

[gogo]

Thank you so much. Your channel helped me develop my own great strategy that helped me grow my account

[ashishwani]

Your videos are very helpful for trading community for new trading ideas, risk management, psychology etc. I love the way u explain everything in simple words and appropriate example. I trade in Indian markets and got benefitted from ur videos. Keep it up. Thank you.

[kapitalidea]

I have honestly learned more from your channel than any other trading channel on YouTube! I can’t thank you enough! In 2020 I decided to learn how to lose weight, I lost 75 pounds and have kept it off. In August of 2021 I decided to learn how to make money in the Stock market. I found your channel 3 months ago roughly and have designed a strategy based on your videos and I’m up with just under 40% returns in that time. I cut losers quickly and let winners run with a strategic understanding of a exit point. I absolutely love your videos! This is the best channel on YouTube as far as I’m concerned! Thank you 🙏 so damn much for your time and teachings! You have my utmost respect and loyalty!

[FinancialWisdom]

My Brokerage Account (Interactive Brokers) - bit.ly/3UGvn1U

[TradeTheMarkets]

Please make videos on Wyckoff and Tom Williams

[BioInsight_Lectures]

Thanks, one of the great learning youtube channel.

[joaosoares]

The videos you make paired with the book titled Technical analysis of the financial markets by John Murphy make an incredible combination. Keep up the good work and thank you for providing so useful information every time.

[julianob.a.]

Great content. I just don't get it why some people uses the first R as risk, and others as reward. Sometimes it gets confusing. But great video and very easy to understand. I'm new to cripto trading, was always a buy and holder, but it's boring to be a hodlr lol.

[Chuckk]

That's me. Willing to ride a stock to zero and take small gains because I am afraid of a reversal

[drdee]

At 5:18, how do you get 4% risk ratio? Thank you.

[therapeutika]

Great videos. Is there one that explains of how often it happens that she stock gaps down in aftermarket and never sells at the stop loss level and what to do in that case? I have found myself with a position still going because it gapped down and I end up becoming an accidental investor because of that.

[williamkz]

Thanks Gareth. Perfectly explained. Another technique, for the non breakout trader (like me), is to buy close to support, or around the 20 week EMA, and calculate risk as distance to support whilst reward is the distance to top of Donchian channel.) If the ratio is better than 2 to 1, it's worth a punt. (Other factors have to be taken into account too, like the MACD.)

[ScottieBeans]

I'm a little confused and I hope someone can explain. In the example he has both trades with a 50% win rate. To me entering the trade later in #2 would confirm the breakout. #1 it would seem would be more apt to have a false breakout. If that's the case #1 would have losing trades that #2 would avoid and therefore #2 should have a higher win rate. What am I missing?

[richardkay]

Hello Gareth,
Excellent video! I understand how you came up with the risk % based on the prior basing and the breakout candle height. But how do you determine what the reward % should be for a trade? For example, do you project based on some fibonacci projection, analyst projections, or do you assume a sell at a particular RR ratio of say 2.5:1 and move on? Thank you.

[jungsa]

Hey, I just want to comment here that I really love your channel and content! I recommend it to anyone interested in trading whenever I can, especially for your commentary and criticism. Thanks you!

[Yan-rhmj]

Reward to Risk is definitely the cornerstone of my strategy. Everything else should be working for it. Momentum, tight setups, timing, relative strength, industries and market conditions.

Great video. Thanks.

[Keyboardsound_]

As usual very nice video I would love when you will make video about Trading Tribe from Seykota