Risk Reward Ratio Tool | Bitcointalksearch.org

Cryptomultiplier

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Quote from: GreatArkansas on November 14, 2023, 05:42:32 PM

Quote from: david678345 on November 11, 2023, 12:38:29 PM

Hi is there any Risk Reward Ratio Tool that sends you a notification when there is a a good Risk Reward ratio for a certain altcoin?

Or the only way is checking every altcoin manually?

This is my first time to hear this.
For me, the risk-reward ratio tool really depends, anytime you can put it but it depends on your trading style or way. Like for example if you will trade at supports/resistance or using any trading chart patterns like CUP and Handle/flag patterns, etc. For sure it is really difficult.

I wonder why some still bother about a risk reward ratio when it is more or less a gamble on chances of outcomes of investments and portfolio.
Only experienced traders would understand such ratio and even apply some of such kind tools to their advantage.
These days even, trading bots from using a Bitget exchange service would deliver such ratio, more simply put.

GreatArkansas

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Quote from: david678345 on November 11, 2023, 12:38:29 PM

Hi is there any Risk Reward Ratio Tool that sends you a notification when there is a a good Risk Reward ratio for a certain altcoin?

Or the only way is checking every altcoin manually?

This is my first time to hear this.
For me, the risk-reward ratio tool really depends, anytime you can put it but it depends on your trading style or way. Like for example if you will trade at supports/resistance or using any trading chart patterns like CUP and Handle/flag patterns, etc. For sure it is really difficult.

Saint-loup

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Quote from: OcTradism on November 12, 2023, 08:38:45 PM

It can be bigger than 1: 3 like 1: 4 or 1: 5. The number for reward is bigger, the better because your chance to get profit will be 3, 4 or 5 times bigger than risk to have loss or at price you have to cut loss.

No you're wrong it's the opposite, the bigger the reward is, the smaller your chances to make profit are because you will be less likely to reach your target for selling/Taking Profit. If you increase your RRR from 1:2 to 1:4 it means you will need to reach a price 2x times higher than the 1:2 one. It can be a huge gap, very unlikely to be filled in the coming days, weeks or even months sometimes.

tjtonmoy

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From what I know, there aren't any tool like this which are available at this moment. Maybe if you know some programming you can come up with something like this. That should require skills to find out how the risk to reward ratio works. But my question is, if you already have the knowledge then why should you go and make something when you can use that knowledge to do it on your own? The more you rely on something other than you the more hard it becomes to keep up. Everything is evolving and we need to keep up with that. The information you feed that tool will only use that information and nothing else. But every day we need to come up with something new.

In theory, it is possible but not the best choice. You should be better off doing it on your own manually. It's just some algorithm and calculations. If you can make it on your own, you should use it but never do something created by others because they're thinking of the market and you're thinking could never be same. Thus, it would be problematic in the future.

Lakai01

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Quote from: justdimin on November 14, 2023, 03:05:19 AM

Even though he didn't mentioned any gambling word there but I still get where you are going. You are only using gambling as an example because indeed that in gambling, we can see a winning percentage for each set of multipliers that we are trying to hit. I never saw one though in the crypto market. I am only aware that some types of trading has a multiplier's involved.

I mentioned gambling because gambling is often used as a reference for risk-reward ratios. This has been around for a relatively long time in the gambling sector, especially for sports betting.
However, it quickly becomes clear why it works in sports in particular: The results are far easier to assess than in classic trading. You know the teams, know the injury status of the players and can also fall back on the results of the teams' previous matches.

Such "additional information" is, of course, completely absent in trading; the most you can incorporate here is the general market sentiment (bullish vs. bearish) or global events such as wars and pandemics. However, deriving a risk/reward ratio from this is very risky and is therefore not really practiced.

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Quote from: OcTradism on November 13, 2023, 08:21:02 PM

Nothing always works like you imagine it will work for you and your trading position but the RRR like 1:3 will help you to accept lower risk and at the same time a chance to get good profit. If you see a RRR is like 1:1 or or less than 1:2 or 1:3, it is like not good choice to take risk.

Trading is accept risk. Investing is accept risk but what level of risk you can accept is a matter.

I get it, even in the gambling scenario I used above, risk ratio is not foolproof. But at least in the case of casinos and especially sportsbooks, their RR is almost always very close to actual execution regardless of variance and upsets. Hence the house always wins. Because laws of probability in long term prove correct there.

But in trading, it's impossible to know the probability, hence a skewed or biased RR. You know the risk, but you cannot know the probability of that risk happening.

In gambling the risk and probability is almost aligned. e.g. 1:2 means 50/50. 1:3 means 33% chance.

But trading 1:3, it's imperfect probability.

justdimin

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Quote from: Lakai01 on November 13, 2023, 07:48:25 AM

Quote from: david678345 on November 11, 2023, 12:38:29 PM

Or the only way is checking every altcoin manually?

Risk-reward in trading is different from that in sports betting, for example, and also depends very much on what other trades you have running and how high the stake per trade is. I think it is almost impossible to transfer this into software.

What does exist, however, are trading signals, which I think fall more into the category you are looking for. But I think it's obvious that these are not really reliable.

Even though he didn't mentioned any gambling word there but I still get where you are going. You are only using gambling as an example because indeed that in gambling, we can see a winning percentage for each set of multipliers that we are trying to hit. I never saw one though in the crypto market. I am only aware that some types of trading has a multiplier's involved.

Trading signals are I think different from what the OP is looking for but one thing is for sure, and that is they are very risky. So we should better rely on our own than on joining them. For the @OP, I think my only advice would be is to know your capacity and then most importantly is risk only money you can afford to lose.

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Quote from: david678345 on November 11, 2023, 12:38:29 PM

Hi is there any Risk Reward Ratio Tool that sends you a notification when there is a a good Risk Reward ratio for a certain altcoin?

Or the only way is checking every altcoin manually?

It doesn't work as described buddy!!

Risk Reward Ratio Tool is used after you make your analysis on the charts and you have determined entry points to buy or sell and setup your take profits or trailing stops then it will execute pending or market orders.

Otherwise notifications can be used when price reaches a certain price of interest then you get an alert on phone or via email.

Quote

Or the only way is checking every altcoin manually?

Perhaps you are more interested in using EAs that will trade automatically for you and not the RR tool.

Yamane_Keto

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You may find Risk Reward Ratio with different names, such as Fear-to-Greed Ratio, Risk Index, Traders’ Enthusiasm, and some other tools, but they all agree on the same idea and differ in the method of calculating it. Some rely on technical analysis indicators, some rely on a questionnaire, some are based on a voting model, and some are predictive models with intelligence. all of them do not give accurate results.

Quote from: david678345 on November 11, 2023, 12:38:29 PM

Or the only way is checking every altcoin manually?

You do not need to do this manually, but you can use these tools to filter your search results. Instead of manually searching through 10 cryptocurrencies, using these tools you can narrow your search to only 20.

OcTradism

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Quote from: wxa7115 on November 12, 2023, 09:25:08 PM

But you can use any ratio you may like, however a higher risk-reward ratio will mean more losing trades and keeping your position open for a longer period of time, and it could be difficult for most traders to deal with the added pressure such a move will entail.

Accept bigger risk means you are more like a gamblers, degen, not like a trader who have careful calculation for your trade and never open a trading position if you see risk is too high and chance to get profit is too low.

Quote from: slaman29 on November 13, 2023, 03:37:32 AM

Saint-loup already pointed out, risk-reward calc don't work the way you think it does. And if the ratio of 1"3 or whichever you think is accurate, then mathematically you should always be making money as a trader.

Risk-Reward calcs are used by sportsbooks a lot but they actually make money because they track live probability a lot as well, very well. Which I believe trading calcs don't do well.

Nothing always works like you imagine it will work for you and your trading position but the RRR like 1:3 will help you to accept lower risk and at the same time a chance to get good profit. If you see a RRR is like 1:1 or or less than 1:2 or 1:3, it is like not good choice to take risk.

Trading is accept risk. Investing is accept risk but what level of risk you can accept is a matter.

Lakai01

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Quote from: david678345 on November 11, 2023, 12:38:29 PM

Or the only way is checking every altcoin manually?

Risk-reward in trading is different from that in sports betting, for example, and also depends very much on what other trades you have running and how high the stake per trade is. I think it is almost impossible to transfer this into software.

What does exist, however, are trading signals, which I think fall more into the category you are looking for. But I think it's obvious that these are not really reliable.

benalexis12

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Quote from: david678345 on November 11, 2023, 12:38:29 PM

Hi is there any Risk Reward Ratio Tool that sends you a notification when there is a a good Risk Reward ratio for a certain altcoin?

Or the only way is checking every altcoin manually?

As far as I know, the no-risk rewards tool is perfect. As we know, the cryptocurrency market is very volatile, which means that even the best risk rewards do not guarantee a profitable trade in this field of business as well.

Now, in another way, we can manually check the risk-reward ratio for each altcoin you are interested in trading. But of course, this only happens when you use a charting platform like Trading View.

slaman29

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Saint-loup already pointed out, risk-reward calc don't work the way you think it does. And if the ratio of 1"3 or whichever you think is accurate, then mathematically you should always be making money as a trader.

Risk-Reward calcs are used by sportsbooks a lot but they actually make money because they track live probability a lot as well, very well. Which I believe trading calcs don't do well.

wxa7115

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Quote from: Saint-loup on November 12, 2023, 01:18:27 PM

Quote from: OcTradism on November 11, 2023, 09:48:13 PM

Risk Reward ration for altcoin investment or trading must start with percent of your capital used for it.

The percent is 10% or less will be good enough for you to manage risk. Assume you do something wrong, make bad decisions with altcoins, you will lose 10% of your capital. It is a loss that is painful but at least you will still have 90% of your capital for Bitcoin that can help you get profit and cover the 10% loss in altcoins.

Now, about Risk Reward Ratio for your entry, exit prices with altcoins, it must be 1: 3. From your entry price, you will have two possible exit prices: one for cut loss, another one for take profit. Entry > Cut loss : Entry > Take Profit should be 1: 3. If you see chance to take profit and profit is less than 3 times of your loss (if you cut loss), don't open that position.

To be honest I don't understand why you (and some other people) think a good Risk Reward Ratio should be and always be 1:3? The market has not always the same direction, sometimes it goes down, sometimes it goes up, sometimes it goes sideways, so why the RRR should be the same for every trend? When we are in a bear market, your Stop Losses are more likely to be triggered while when we are in a bull market they are less likely to be triggered and Take Profit targets are more likely to be reached so the RRR should be adapted to the current trend of the market if you want to have a smart money management IMO.

That risk-reward ratio is so common because it is probably the one that is the best of both worlds, as it does not force a trader to take massive risks but it is not too conservative either.

But you can use any ratio you may like, however a higher risk-reward ratio will mean more losing trades and keeping your position open for a longer period of time, and it could be difficult for most traders to deal with the added pressure such a move will entail.

OcTradism

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Quote from: Saint-loup on November 12, 2023, 01:18:27 PM

To be honest I don't understand why you (and some other people) think a good Risk Reward Ratio should be and always be 1:3? The market has not always the same direction, sometimes it goes down, sometimes it goes up, sometimes it goes sideways, so why the RRR should be the same for every trend? When we are in a bear market, your Stop Losses are more likely to be triggered while when we are in a bull market they are less likely to be triggered and Take Profit targets are more likely to be reached so the RRR should be adapted to the current trend of the market if you want to have a smart money management IMO.

It can be bigger than 1: 3 like 1: 4 or 1: 5. The number for reward is bigger, the better because your chance to get profit will be 3, 4 or 5 times bigger than risk to have loss or at price you have to cut loss.

I understand your point that in a beginning of bear market like 2021, traders have big risk to lose money because altcoins can lose 80% or 90% from their all time highs. It's different in last two months when bear market is coming to an end and it's less risky to trade or invest in good altcoins and hold them. I see latest months are good times to have good RRR with altcoins.

Risk with altcoins is always high.

BitcoinsGreat

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Quote from: david678345 on November 11, 2023, 12:38:29 PM

Hi is there any Risk Reward Ratio Tool that sends you a notification when there is a a good Risk Reward ratio for a certain altcoin?

Or the only way is checking every altcoin manually?

There are many automated tools available where you input certain values and it will calculate your Risk Reward ratio. One of the sites that sometimes i use for this purpose is https://calc.trade/

Also, the trading view also provides the long and short position tool and when you apply it on the chart, it will show you the risk reward ratio and you can adjust it too.

Screenshot of that tool when applied on the chart:-

Saint-loup

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Quote from: OcTradism on November 11, 2023, 09:48:13 PM

Risk Reward ration for altcoin investment or trading must start with percent of your capital used for it.

The percent is 10% or less will be good enough for you to manage risk. Assume you do something wrong, make bad decisions with altcoins, you will lose 10% of your capital. It is a loss that is painful but at least you will still have 90% of your capital for Bitcoin that can help you get profit and cover the 10% loss in altcoins.

Now, about Risk Reward Ratio for your entry, exit prices with altcoins, it must be 1: 3. From your entry price, you will have two possible exit prices: one for cut loss, another one for take profit. Entry > Cut loss : Entry > Take Profit should be 1: 3. If you see chance to take profit and profit is less than 3 times of your loss (if you cut loss), don't open that position.

To be honest I don't understand why you (and some other people) think a good Risk Reward Ratio should be and always be 1:3? The market has not always the same direction, sometimes it goes down, sometimes it goes up, sometimes it goes sideways, so why the RRR should be the same for every trend? When we are in a bear market, your Stop Losses are more likely to be triggered while when we are in a bull market they are less likely to be triggered and Take Profit targets are more likely to be reached so the RRR should be adapted to the current trend of the market if you want to have a smart money management IMO.

OcTradism

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Quote from: david678345 on November 11, 2023, 12:38:29 PM

Hi is there any Risk Reward Ratio Tool that sends you a notification when there is a a good Risk Reward ratio for a certain altcoin?

Or the only way is checking every altcoin manually?

Risk Reward ration for altcoin investment or trading must start with percent of your capital used for it.

The percent is 10% or less will be good enough for you to manage risk. Assume you do something wrong, make bad decisions with altcoins, you will lose 10% of your capital. It is a loss that is painful but at least you will still have 90% of your capital for Bitcoin that can help you get profit and cover the 10% loss in altcoins.

Now, about Risk Reward Ratio for your entry, exit prices with altcoins, it must be 1: 3. From your entry price, you will have two possible exit prices: one for cut loss, another one for take profit. Entry > Cut loss : Entry > Take Profit should be 1: 3. If you see chance to take profit and profit is less than 3 times of your loss (if you cut loss), don't open that position.

Saint-loup

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Quote from: david678345 on November 11, 2023, 12:38:29 PM

Hi is there any Risk Reward Ratio Tool that sends you a notification when there is a a good Risk Reward ratio for a certain altcoin?

Or the only way is checking every altcoin manually?

Risk Reward Ratio in trading doesn't work as you seem to think it does. It's not a magic formula giving you the actual likelihood to win a trade or to lose it, it's just a tool that helps traders to manage their bankroll because money management is one of the most important thing in trading.
The risk/reward ratio is actually the amount you risk for the amount you could potentially gain. So basically for a random trade it's the amount of money you will lose if your Stop Loss is triggered onto the amount you will earn if your Take Profit target is reached. So it's only you who is able to determine it with your trading targets.
Small Stop Losses with high TP target trades are more likely to be lost but losses for each of those trades are smaller though.

https://www.investopedia.com/terms/r/riskrewardratio.asp

Mr.right85

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Is there?

Because there is non that I have heard of or it’s familiar with.
Would there ever be any if not in existence already?
I think not. Like, what would be the variables to be considered in getting anything close to a risk to reward ration with minimum accuracy…? I don’t see how any variable come apply here as the crypto market don’t play by any particular set of rules but, whatever is consistent at a time.

Your best bet would always be to consider every investment options independently and hope for the best.

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