Risk & reward · Lesson 02
My winners are smaller than my risk, on purpose
The setup
- Risked per trade
- ~$100
- A clean winner
- a little over half
- What carries it
- win rate
"Looks backwards. But my algo takes half off early and moves the stop to break even, so a lot of would-be losers end up as scratches."
▶ Watch the ShortTry it: can small winners carry bigger losers?
Small winners only work if enough trades end as winners, and a scratch (a trade closed at break even) is a loser that didn't happen. Move the sliders and watch what scratches do to the win rate you need.
winners scratches losers
Per 100 trades
Winner and loser sizes are roughly mine. The win and scratch rates are made-up starting points: move them. This is arithmetic, not advice.
What it taught me
I risk about $100 a trade, and a clean winner makes a little more than half of that. On paper that looks backwards.
It works because of what happens to the trades in between. Taking half off early and moving the stop to break even turns a lot of would-be losers into scratches, and that’s what lets the win rate carry it.
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