risk to reward the right balance?
risk to reward the right balance?
I am currently trying to figure out a good trading strategy and also learn pine script. I have been trying to develop a strategy using trend analysis with MA signals. Nothing majorly complicated. On paper it is going OK
I developed a systen with long and shorts and over 16 pairs had an average success rate of 56%
I think the code for shorts was off so removed it and when with longs
Got an average over the 16 pairs of 75% wins although there where major differences 90% with btc 30% with XRP
The issue I am having however is with stop loss and general risk reward.
Basically I have a tight tp level and a loose sl. This means with BTC going long despite a 90% win rate I have only got 10% profit going all in each trade (this is better than the 0.39% if I held during the same period)
While with ETH I have a win rate of 75% but a loss of 8% on account
I am trying to figure out how to get the balance right between r:r in a market that is volatile. I am looking at a moving stop loss and connecting it the ATR but having issues coding this properly.
What are peoples thought on the best r:r or how do you set these levels
Using a tight take profit margin will make it somehow impossible to consider losses as part of the business and will make you find it difficult using stop loss. Go for a more higher profit that is realistic so if you make profits it should be able to cover up for losses if your stop loss get triggered. Setting your stop loss is upto you based on your method of analysis but it should be void of greed and should be capable of withstanding your account size