Risk reward ratio
I created my own risk to reward ratio system but the problem is that I don't understand at what percentage i use to be profitable in long term
Your very own post explains that. You simply divide the risk by the reward and that's the strike-rate you need to break even.
viewtopic.php?f=36&t=26363&p=311327#p311327
I set 10% for loss both side and 12.5% for profit whatever i want at any side.
If i back team A 10000 @ 1.5 odds and if odds comes in my favour @ 1.33 so i have a multiple choice i can make any ratio whatever i want but my system says go with 4 to 1 and i lay 9545 @ 1.33.
So now on team A i am winning 1819 and on team B i am losing -455
My confusion is am i using risk reward ratio correctly.
If i back team A 10000 @ 1.5 odds and if odds comes in my favour @ 1.33 so i have a multiple choice i can make any ratio whatever i want but my system says go with 4 to 1 and i lay 9545 @ 1.33.
So now on team A i am winning 1819 and on team B i am losing -455
My confusion is am i using risk reward ratio correctly.
If i back team A 10000 @ 1.5 odds and if odds goes against @ 1.66 i accept same loss on both team.azfyazfy wrote: ↑Thu Oct 06, 2022 6:59 pmI set 10% for loss both side and 12.5% for profit whatever i want at any side.
If i back team A 10000 @ 1.5 odds and if odds comes in my favour @ 1.33 so i have a multiple choice i can make any ratio whatever i want but my system says go with 4 to 1 and i lay 9545 @ 1.33.
So now on team A i am winning 1819 and on team B i am losing -455
My confusion is am i using risk reward ratio correctly.
azfyazfy wrote: ↑Thu Oct 06, 2022 7:05 pmIf i back team A 10000 @ 1.5 odds and if odds goes against @ 1.66 i accept same loss on both team 1000azfyazfy wrote: ↑Thu Oct 06, 2022 6:59 pmI set 10% for loss both side and 12.5% for profit whatever i want at any side.
If i back team A 10000 @ 1.5 odds and if odds comes in my favour @ 1.33 so i have a multiple choice i can make any ratio whatever i want but my system says go with 4 to 1 and i lay 9545 @ 1.33.
So now on team A i am winning 1819 and on team B i am losing -455
My confusion is am i using risk reward ratio correctly.
What currency are you using? When using examples it helps to use smaller figures like £10, the maths is the same.azfyazfy wrote: ↑Thu Oct 06, 2022 6:59 pmI set 10% for loss both side and 12.5% for profit whatever i want at any side.
If i back team A 10000 @ 1.5 odds and if odds comes in my favour @ 1.33 so i have a multiple choice i can make any ratio whatever i want but my system says go with 4 to 1 and i lay 9545 @ 1.33.
So now on team A i am winning 1819 and on team B i am losing -455
My confusion is am i using risk reward ratio correctly.
If you win from such trades more than 20% of the time it would be beneficial, otherwise it won't.
You also need to consider the benefits of consistent profits. If you always green up and grab the cash (or cut your losses), it may not be the most optimal result profitwise, but securing a profit every week and avoiding the odd disastrous week is worth paying a few quid for. If you ever study the Kelly Criterium you'll realise that sometimes when you're in a position to guarantee a profit it can be mathematically sound to place a poor value bet to get rid of your liability and guarantee a profit.
So you cut your losses when the trade goes against you but you let your bet run when the market suggests it's value. Nothing wrong with that, I used to let my profits run as free bets and red-up my losses. I'd get a few big wins but I'd also have runs of frustration when juicy free bets fall by the wayside. I found my results are more consistent and less stressful by greening up and moving on.azfyazfy wrote: ↑Thu Oct 06, 2022 7:05 pmIf i back team A 10000 @ 1.5 odds and if odds goes against @ 1.66 i accept same loss on both team.azfyazfy wrote: ↑Thu Oct 06, 2022 6:59 pmI set 10% for loss both side and 12.5% for profit whatever i want at any side.
If i back team A 10000 @ 1.5 odds and if odds comes in my favour @ 1.33 so i have a multiple choice i can make any ratio whatever i want but my system says go with 4 to 1 and i lay 9545 @ 1.33.
So now on team A i am winning 1819 and on team B i am losing -455
My confusion is am i using risk reward ratio correctly.
You can't calculate how much you'll win. You can only try it to small experimental stakes and see how you do. If you keep all the details of each trade in a spreadsheet you can easily work out "what ifs?" and see if greening up would be more profitable.
Obviously you'll have reasons behind your system but you have to put it to the test, look at the results and be prepared to adjust and optimize it.