What is a good risk to reward ratio in forex?
Answers from top 9 papers
More filters
| Papers (9) | Insight |
|---|---|
19 Oct 1997 | Many investors are interested in managing their risk: they may be willing to increase their risk for some form of reward. |
77 Citations | FRN findings suggest that the reward prediction error signal is increased after high-risk decisions. |
28 May 2006 | Excluding the assumption of normality in return distributions, a general reward-risk ratio suitable to compare portfolio returns with respect to a benchmark must includes asymmetrical information on both “good” volatility (above the benchmark) and “bad” volatility (below the benchmark), with different sensitivities. |
| Finance academics and professionals, however, prefer to value risky prospects in terms of a trade-off between expected reward and risk, where the latter is usually measured in terms of reward variance. | |
36 Citations | In this article, we show that the most popular of these metrics, i. e., the Sharpe ratio and 12 alternative reward-to-risk ratios based on drawdowns, partial moments and the Value at Risk, yield almost identical rank orderings across futures-based commodity investments in energy, precious metals, industrial metals, agriculture, and livestock. |
34 Citations | We conclude that risk aversion to variability in reward amount is a robust phenomenon for some reward distributions. |
Open access•Posted Content | As anticipation of diverse rewards can increase NAcc activation, even incidental reward cues may influence financial risk taking. |
Open access•Posted Content | In conclusion, the study confirms the extremely high level of risk in Forex trading, which is inappropriate for the majority of individual investors. |
139 Citations | Overall, the results confirm the presence of multifractality in forex markets, which demonstrates, in particular, (i) a decline in the efficiency of forex markets during the COVID-19 outbreak and (ii) heterogeneous effects on the strength of multifractality of exchange rate returns under investigation. |
Related Questions
How to trade the forex market?5 answersTo trade the forex market successfully, traders need a well-defined trading plan. This plan should incorporate strategies based on technical analysis, fundamental analysis, and algorithmic trading techniques. Understanding market liquidity, bid-ask spreads, and trade volume is crucial, as these factors are influenced by both macroeconomic fundamentals and market microstructure. Implementing a context-aware algorithm like the parallel elastic network model (PENM) can help model forex market behavior effectively, providing valuable insights for traders. Additionally, utilizing a combination of technical indicators such as Relative Strength Index, Triangular Moving Average Bands, and price values can aid in making informed trading decisions with sound risk management techniques. By integrating these strategies and tools, traders can enhance their ability to analyze the market, execute trades confidently, and manage risks effectively in the dynamic forex market.
How to trade forex with AI profitably ?4 answersTo trade forex profitably with AI, it is important to consider the following steps. First, develop an investment agent based on a deep reinforcement learning model that can operate 24/7 and trade with high frequency. This model should also consider transaction costs and create a framework for long-term trading to maximize profits while keeping costs low. Additionally, use online learning to continuously update the system with the latest market trend information, allowing it to trade in non-stationary financial markets. It is also beneficial to compare the performance of AI agents to traditional trading strategies, such as the buy-and-hold strategy and expert traders. AI has been shown to outperform these strategies in forex trading, but results may vary depending on the currency pair being traded. By incorporating neural networks and expert systems, a hybrid AI system can be developed to support forex trading decisions, combining quantitative data prediction with qualitative factors and expert knowledge.
How can I make a Forex Robot?15 answers
How to calculate risk reward ratio in mt4?10 answers
What is a good risk to reward ratio forex?9 answers
What is a good risk/reward ratio for options?10 answers