Three-target systems: TP1, TP2 and a runner — how do you size them?
Splitting an exit into three targets — close a third at each, run the rest — smooths the equity curve but complicates the maths. The sizing of each slice decides the expectancy.
What's your split?
- the fractions you close at each target
- where the targets sit in R terms
- how you manage the runner after TP2
The risk-reward guide gives the framework for testing splits.
Background: Risk-reward ratio, win rate and expectancy: the maths behind a trading edge
A high win rate can still lose money. See how win rate and risk-reward combine into expectancy, with break-even win rates and worked examples.
What is a good risk-reward ratio in forex?
There isn't one right ratio. What matters is expectancy, the win rate and ratio together. A 1:2 ratio breaks even at about 33% winners before costs, while a 1:1 ratio needs 50%.
How do you calculate trading expectancy?
Multiply the win rate by the average win and subtract the loss rate multiplied by the average loss. Measuring wins and losses in multiples of the amount risked (R) makes the result easy to compare.
Comments
Log in to join the discussion. Comments follow the community guidelines.
Log in to commentLoading comments…