I am going to explain how important your Risk to Reward (R:R) ratio is in trading. By examining a system that uses a 4:1 risk-reward ratio and testing it 100 times in a row. I will demonstrate how a system with a very low winning percentage actually makes tons of profits. This is a very important aspect for new traders to understand and I hope this demonstration emphasizes that point.
Trader’s Landing is a trading system review and education channel. By testing indicator-based trading strategies we are able to learn and understand a system’s performance by using a repeatable and clearly defined trading criteria that has a predictable performance through a series of many setups. These trading systems can be ported over to many instruments such as Forex (FX), Cryptocurrency (Crypto), Options, Stocks, or anything that has a chart and a significant amount of volume and market participants.
WARNING: Be sure to do exhaustive backtesting and forward testing before you actually start trading real funds. For your convenience below is a link to the official Trader’s Landing backtesting spreadsheet and tutorial video.
See a trading system you would like tested on this channel? Be sure to let me know, including links where you found it, and any other pertinent information. In many ways you are the eyes and ears of this channel.
Link to the thread on Babypips where I found this system:
https://www.babypips.com/trading/forex-hlhb-system-explained
Timestamps:
00:00 - Introduction
00:45 - Indicators
02:47 - Rules & Examples
05:35 - Test
05:57 - Testing Results
System Specifics
Time Frame
H1
🏆 Trader’s Landing Score: 7
Indicators
5 EMA (Built in Tradingview Indicator)
10 EMA (Built in Tradingview Indicator)
RSI (10) with a 50 median line (Built in Tradingview Indicator)
ATR Bands by Alexander TeaH (free TradingView Indicator) set at 2 times ATR. Link:
https://uk.tradingview.com/script/uTetNB3s-ATR-Bands/
Long Entry
5 EMA crosses above the 10 EMA.
RSI crosses above the 50 line.
Short Entry
5 EMA crosses below the 10 EMA.
RSI crosses below the 50 line.
R:R
4:1
Where to place stop-loss
2 X ATR
Indicators tested on this channel so far:
ATR Bands, Donchian Channels (DC), Double Exponential Moving Average (DEMA), Dynamic Structure Indicator, Exponential Moving Average (EMA), Heikin-Ashi Candles, Ichimoku Cloud, Money Flow Index (MFI), Interstellar Buy/Sell, Interstellar Trend, Multi Timeframe EMA, QQE (Qualitative Quantitative Estimation) Mod, Relative Strength Index (RSI), SSL Channel, SSL Hybrid, Stochastic (STOCH), Stochastic RSI, SuperTrend STRATEGY, Time Segmented Volume (TSV), VuManChu Swing Free, Waddah Attar Explosion V2, Weighted Average Price (VWAP), Williams %R
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⚠️Disclaimer: This content references opinion and is for information purposes only. Not intended to be investment advice. Seek a licensed professional for investment advice.
