Ratios

#1

In the latest webinar the ratio of 10 to 5 contracts was chosen. Would you please explain again the reason behind doing it.

#2

Using the spread scanner based on the risk reward i desired to equalize risk on the trades. ie say risk on one side is $7.00 and on the other is $14.00 then i may do 2 on the $7.00 side and $14.00 on the opposing side. This may happen as one side is ITM and the other side is OTM. Making double in the ratio side allows the risk/take profit to be made faster despite being OTM as double theprofit is made when it moves in its direction.

Also if i have a bias one way or the other i may decide to ratio the straddle but using the other side to help hedge off the trade.

#3

Here is an image from this morning of a potential winning ratio of 9:1.

EUR/USD > 1.3060 (3AM)

#4

Yes that would have been an excellent trade did you take it?

That would be a win/loss ratio.

I believe scshourie was referring to buying 10 spreads and selling 5 spreads a 2:1 ratio straddle.

#5

Darrell,

Can you or another expert just briefly show my how to calculate 1:1 take profit orders, if I were to do a spread straddle. I watched it in a video that you did, but I can’t relocate the video.

For example, let’s say I had $14 risk on the buy spread and a $21 risk on the sell spread.

Thank you!

#6

What is your total risk ie say 15 on sell side and 10 on the buy side total risk is $25

Total Risk + the opposing side so say sell side had 15 risk and total risk was 25 you need to net $40 to make your original $25 risk and the 15 lost on the short side assuming the market rises.