I promised to explain to Jasmine about why the idea of her trading strategy with a RR of just 1 and a success rate of 70% could be improved and optimised.
Please don't think that with 70% win ratio an RR of just 1 you cannot make money - as long as your MM is good - you will make money - BUT - you can make a lot more and improve it.
At the moment from what I understand Jasmine looks for a target on a trade opportunity and gives approx the same amount of pips as a stop - as the target .
So if her target on say a buy is 45 pips - her stop will be around the same - and if the target is 90 pips - the stop would be around 90 pips.
Her theory is 2% stake - outcome she either wins or loses 2% - clear cut - and stake size would be smaller on larger targets and larger on smaller targets - ie 100 pip stop say - 1lot - 25 pip stop and target 4 lots - as same stake %.
Now lets look at a statistical minimum of 30 trades - enough to explain etc.
In theory she will win 21 trades and make 2% on each trade - and lose 9 trades and lose 2% on each one
Result - plus 42% minus 18% - result on 30 trades - increase in account by 24%.
Now that's great and 24% increase in your account in a month is very good - in a week excellent - in a quarter - average.
So to improve it - decrease stop sizes and even target sizes - don't increase them looking for say 200 pip targets - look for 20 pip targets - but not with 20 pip stop - ideally under 10 pips stops.
If you look at any pair and say a 30 min or hr chart - you will see every day moves of over 20 pips that could be taken with 3 pip stops - when you fully understand the market.
So of we can get targets of 20 pips and stops of 10 pips - then RR 2
Lets say win ratio goes down to 60% - ( Sundaram and FX bear will laugh at so low win ratios ) - the results are
On 30 trades new result - 2% stake - 60% success
21 trades at 4% = 84% and 9 losses at 2% = 18%
New result 84 -18 = 66% on 30 trades compared to 24% - massive improvement.
When you get down to scalper level - ( this can be verified by at least 10 traders in this forum - with live accounts) -
Win ratio 70%+ - RR averages 2.5 - great trades over 7+ - average trades 3 and bad trades 1
So 30 trades with 12 pip targets and 4 pip stops - not many pips - but result on your account a 2%
21 winners at 2.5 x 2% = 21 x 5 - 105% - 9 losses at 2% = 18%
Net result 105 -18 = 87% result compared to 66% and 24% as at present on a RR of I
Jasmine - forget the 100+ pip targets - get down to the 15 pips - there loads of them ;-))
I hope this make sense and will help you "optimize" your present strat