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Aromo
Aromo Mar 29, 16 11:33 AM

Sorry for the ignorance, what do you mean by if the r/r is not 1:3 ?

me_bruch
me_bruch Mar 29, 16 11:59 AM

r/r is short for risk/reward. You typically want to enter a position where your reward is greater than you risk. You determine this through technical, fundamental, and news analysis. So a r/r of 1:3 means for every dollar I may lose I stand to make 3 dollars. 1:3. The stock market is somewhat predictable but could always move against the way you believe it will. Therefore you want to limit your risk of loss. And know your reward potential. You use a 1:3 ratio because even if it does not

me_bruch
me_bruch Mar 29, 16 12:01 PM

get to 3, you can always start to lower your holding or cash out at 2 if the market starts to turn. Knowing your risk amount allows you to set your stop loss which is super important when shorting.

Aromo
Aromo Mar 29, 16 1:55 PM

Thanks for the info!

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