Friday, 3 August 2018

The Most Important Indicator in NinjaTrader

There is a very often repeated theme in this blog going back to when it began in October 2009: the math of trading has to work.

If your stats are not right there is no way you can get to CP.

This is an aspect of trading that most people don't focus on at all. It's all about entries for most people and this is fine if that includes knowing where your exits have to be for you to be CP.

When I enter a trade I have a good idea of what the market has to do for me to be wrong so I know what my loss will be. I also know what my win rate is going to be, more or less. Those two numbers tell me what price has to be exceeded for me to be CP.

If my win rate was 34% and my stop was 2 points away then I need a profit of at least 4 points to break even. So I look at my charts to see where resistance is. If its les than 4 points from my proposed entry then the trade is not "good".

If my win rate is 67% and my stop is 2 points away then my break even is 1 point from my proposed entry. I can then need resistance to be only more than 1 point away.

Of course I am looking for trades where resistance is far enough away to make 3, 4 or more times my risk. Reading the order flow and trading the swings from accumulation to distribution allows this to happen often enough.

Well, what's that MOST IMPORTANT INDICATOR in NinjaTrader? Its in the pic.

It's the Risk-Reward tool found under Drawing Tools. Using it can make you CP.

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