Strategies for trading with the best R/R

One of the most optimal strategies with the best risk/reward ratio is the level breakout strategy, the example of which is shown in our previous article. The optimal ratio is achieved due to the fact that due to the impulse the instrument price can gain by triggering stop-loss orders and the entry of additional market participants, the trader can plan a fairly powerful movement and, accordingly, a large profit, and the protective stop-loss order can be set below the previous local minimum or above the previous local maximum and the distance to such minimum or maximum will be at least three times less than to the potential level, where.

One more strategy with the best risk/reward ratio is range trading, i.e. when the instrument is in a sideways trend in the absence of a clear trend. During the consolidation phase in a long-term trend, either before the movement continues or before the reversal, the instrument can be traded in a wide range for quite a long time, allowing a trader to profit from the fluctuations made by the price between the upper and lower bounds of the range.

Using support or resistance levels it is possible to trade on moving averages. On a steady trend, depending on its scale, MAs with periods of 20, 50, 100; 50, 100, and 200 are used. On short-term trends, you can consider MA 20 as support or resistance, and on longer trends, MA 50 or MA 100. In the latter case, when prices approach the MA 200, it may also be used as support or resistance.

Thus, when opening a trade a protective stop-loss order is placed slightly below the moving average above or below which the instrument price passes, and in these cases, a trader can also get the opportunity to follow the trend and capture quite a large movement with a relatively small stop-loss order in terms of distance.

Also, if you want to use all available trading tools to increase your capital as soon as possible - follow this link below, or contact us via live chat. Our experts will help you to choose the best strategy for success.