In trading the stock market, there is always risk and there is always reward. I'll start by defining these terms in the simplest way I can. Risk means the potential amount of money that you will lose in a trade and reward means the potential amount of money that you can earn from a trade. The ratio shows the relationship of the two. The risk reward ratio is derived by dividing risk by the reward. The lower the number, the better of course.
Though we want to be rewarded with the maximum profit, we should also understand that in every reward there is a corresponding risk. Many says that the higher the risk, the higher the reward. I disagree on that saying. You can control the amount of risk and maximize your reward if you do advance study and preparations before getting in the trade.
That will be the focus of this site. Although we will be presenting technical charts and we'll be doing technical analysis on stocks listed at the Philippine Stock Exchange, our goal is to learn how to determine the risk reward ratio that will control our risk while optimizing our profit. Our goal is to enter a trade where Risk Reward Ratio is 1:3 (0.33) or lower. The odds should be in our favor.
This site will give you ideas on the support and resistance of the stock using technical analysis. What it will not do is advise you an exact entry and exit point because risk tolerance of every individual varies.
Though we want to be rewarded with the maximum profit, we should also understand that in every reward there is a corresponding risk. Many says that the higher the risk, the higher the reward. I disagree on that saying. You can control the amount of risk and maximize your reward if you do advance study and preparations before getting in the trade.
That will be the focus of this site. Although we will be presenting technical charts and we'll be doing technical analysis on stocks listed at the Philippine Stock Exchange, our goal is to learn how to determine the risk reward ratio that will control our risk while optimizing our profit. Our goal is to enter a trade where Risk Reward Ratio is 1:3 (0.33) or lower. The odds should be in our favor.
This site will give you ideas on the support and resistance of the stock using technical analysis. What it will not do is advise you an exact entry and exit point because risk tolerance of every individual varies.
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