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How To Calculate Risk/Reward Ratio

QuestionsCategory: QuestionsHow To Calculate Risk/Reward Ratio
Torin Catanzaro asked 6 months ago
When setting up for potential trades, as the title suggests, how do I figure out what the risk-to-reward ratio is? With this style of trading, we try to let stocks ride as much as we can, it's not really range trading right? So where do you base a point of resistance to calculate potential reward.  If we don't know how high a stock could climb how do we know what the potential profit target is. One of the ways I've thought about solving this issue is by figuring out my win/loss percentage by trial and error. Once I know the win/loss percentage I can figure out what the percent gain I need for each winning trade is to be profitable and I can estimate that way.   Any insights would be greatly appreciated, thank you.
1 Answers
Avatar photoOwen Staff answered 6 months ago
Hi Torin, Pat made this video for you...