How to find extraordinary opportunities
Holy Cows Series 2
Traders are often advised to work with a risk-reward ratio of 1:2. In this way, they would "only" need a hit rate of a little over 33.33% to trade profitably. Mathematically, this may be true, and it also sounds plausible. However, the question is whether it really works that way.
In this short book in the series "Holy Cows", Heikin Ashi Trader pursues the question of how to find trades with a risk-reward ratio of at least 1:10 or higher.
He begins with the observation that it is much more effective to grow your account with a few "asymmetric trades" than with the 1:2 model. Thus, traders should try to become specialists in extraordinary opportunities.