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Ireoluwa
@ireoluwa001
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I love trading
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BTC gave us a fakeout above 87k. Once it started making lower highs on M15, I entered short. First target was that low at 86,115. Done for the day on BTC.
Present coach. Skipped Gold volatility this morning, watching AUDUSD sell setup and V10 for buy opportunity after that liquidity sweep. Will update if I take anything.
Guys, AUDUSD looking tight at 0.71145. Are we expecting a buy continuation or a sell reversal from here?
3. Answer: C. Risk-to-Reward✅
Quick breakdown:
RR = Risk-to-Reward Ratio
It compares how much you’re risking vs how much you’re aiming to make on a trade.
Example:
If your Stop Loss = $50 risk and your Take Profit = $150 target
Then your RR = 1:3 → "Risk $1 to potentially make $3"
Rule of thumb traders use:
Most aim for at least *1:2 RR so even if you only win 40% of trades, you can still be profitable.
Think of 3 wins cancel 3 losses:
3W = +$120, 3L = -$60 → Net = +$60
Left with 2W = +$80
Total = $60 + $80 = +$140
Got you let’s solve it with the "Net per trade" method instead
Method 2: Average outcome per trade
Step 1: Find net result for 1 win and 1 loss together
1 win = +$60
1 loss = -$20
Net for a win+loss pair = $60 - $20 = +$40
Step 2: See how many win+loss pairs we have
We have 4 wins and 6 losses.
We can make 4 full pairs of win+loss = 4 × $40 = +$160
Step 3: Account for the extra losses
We used 4 wins + 4 losses in the pairs.
That leaves 2 extra losses: 2 × -$20 = -$40
Step 4: Total P/L
$160 - $40 = *+$120
Answer: A. +$120
Key numbers to check:
- Win Rate : % of trades that were profitable
- Profit Factor : Total profit ÷ Total loss. >1.5 is solid
- Max Drawdown : Biggest drop from peak. Can you handle it mentally?
- Avg Win vs Avg Loss : Are your winners bigger than losers?
Important note:
Past results don't guarantee future results. Markets change.
After backtesting, traders do forward testing = paper trade it live for 1-2 months.
In one sentence:
Backtesting answers: "If I used this strategy for the last 500 trades, would I be profitable?"
What is backtesting?
Backtesting is testing your trading strategy on past market data to see if it would have made money before you risk real cash.
7. What is drawdown?
Answer: Drawdown = How much your account drops from its peak.
Example: You peak at $10,000, then drop to $8,000 = 20% drawdown.
It measures how much pain you went through. Low drawdown = pro trader.
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