Forex Tading Tables

There are many trading systems out there in the market. As Sam mentioned in his post at forextradingzen.net

If you’re trading somebody else’s system, when something goes wrong, all you can do is get mad at them – you’re powerless to actually do anything about it.

So, the following are some of the things I recommend, when you are looking for a trading system or when you are developing your own trading system.
1:1 Risk Reward Trading Systems:
Let’s say your trading system is a 1:1 Risk Reward trading system. This means for every X number of pips you are risking you are aiming for the same X number of pips. In this case your winning to losing trades ratio should be >1. This can be per week or per month.
I will explain this using the following example.
Your system requires 10 pips stop loss and the take profit level is 10 pips. Let’s say you are doing 10 trades per week and number of winning trades are 5 and losing trades are 5.
In this case the total profit per week is “0” pips. So in the case of 1:1 Risk Reward systems your winning to losing trades ratio should be >1.

1:2 (or more) Risk Reward Trading Systems:
If the profit of your trading system is two times than the loss you are risking your winning to losing trades ratio can be <1. Let’s say your system requires 10 pips stop loss and the take profit level is 20 pips. That means for every 10 pips you are risking you are aiming for 20 pips profit.

As you see from the above example when the risk to reward ratio is 1:2, with 4 winning trades and 6 losing trades you are still in 20 pips profits. That means the winning to losing trades ratio is 0.66. If the winning to losing trades ratio is 1 you will be in a profit of 50 pips.
So for a 1:2 risk reward trading system, I recommend the winning to losing trade ratio of at least 1.
2:1 (or more) Risk Reward Trading Systems:
I don’t normally recommend this kind of trading systems as the winning to losing trades ratio should be much greater than one. In this case you are risking 2X number of pips for every X number of pips you are targeting. Check the following example.

As you see from the above example you should have the winning trades more than double the losing trades to be in profits.
Conclusion:
Aim for trading systems with

1. 1:1 Risk Reward Trading Systems with Winning to Losing Trades ratio of >1
2. 1:>1 Risk Reward Trading Systems with Winning to Losing Trades ratio of at least 1.