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Positive Risk:Reward Ratios Make for Fast Recoveries

Positive risk:reward ratios are one of our most potent tools with the Trend Jumper when it comes to enduring profitability.  It is impossible to control what price action will do and sometimes the most obvious winning setups are the ones that just are not going to work out.  That’s trading.  Moreover, it is often the most uncomfortable setups that prove to be the best trades.  That’s why it is so important to follow a proven tradeplan and strategy like the PTU Trend Jumper.

The TJ has positive risk:reward ratios built into every setup.  So when early trades in the plan don’t work out, the winners quickly bring us back to positive.  Today there were several one and done sessions where we didn’t have to worry about staging a comeback.  But a few markets started out with losses before getting to positive.


Today’s Daytrade results:

  1. DAX; one and done for + 42 points
  2. Crude Oil; one and done for + .13; this was a modest gain and there were plenty of winning trades to follow but I like that we were able to get in, get out and get done in just a few minutes.
  3. Soybeans; one and done for + 2.25; this one also taking just a few minutes
  4. Heating oil; two and done for + 85 ticks
  5. Russell eMini required several trades but before the morning was done, we finished up + 2.7 points
  6. Dow eMini is still fighting it out.  The market was so slow, it was only able to produce 4 trades, the final one is still going.  If it wins, it will be a positive session.  If it loses, we’ll have to see if we can get a pm trade.
  7. EURJPY; too slow with very little range or movement.  It’s reflecting the world we live in these days
  8. Other markets were profitable too, but those are what I follow on a daily basis.

Nothing displays positive risk:reward ratios better than Heating Oil futures.  You can see it visually on the chart when you look at the space between the entry and stop vs the entry and target.  Add to that a running trailer that exceeds the target and you have positive risk:reward ratios that often end up being better than 2:1.  Today, that worked in our favor.  The first trade was a loss.  The second trade, due to its positive risk:reward ratio, put us on top in a significant way, turning a negative to a positive in just one trade.

The Russell eMini also let its positive risk:reward ratio turn its session around.  After a 1 tick breakeven trade and two losses, it had some work to do to stage its comeback.  TJ ends up with positive sessions over 85% of the time.  It’s the great setups with positive risk:reward ratios coupled with smart tradeplans with long winning track records that help make that possible.  The Russell ended up + 2.7 before the session was finished for us.

Heating Oil futures, using momentum bars with Trend Jumper, has one of the best positive risk:reward ratios, which always seems to work in our favor. Today, Heating Oil barely moved but it moved enough for us to pick off a nifty 85 ticks in the first two trades.  Check it out.





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