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Risk & Reward Worksheet: Questions:How Big Is Your Average Loss (Your Risk Per Trade) ?

This document contains a risk and reward worksheet to analyze the probability of success or ruin of a trading strategy based on key parameters. It calculates the expected average win or loss in dollars for different winning percentages between 30-80% and average win sizes from $500 to $4,000, assuming an average loss of $1,000. It indicates negative expected returns mean the trader needs to increase their winning percentage or ratio of win to loss sizes to improve their odds.

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riddajeen
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36 views6 pages

Risk & Reward Worksheet: Questions:How Big Is Your Average Loss (Your Risk Per Trade) ?

This document contains a risk and reward worksheet to analyze the probability of success or ruin of a trading strategy based on key parameters. It calculates the expected average win or loss in dollars for different winning percentages between 30-80% and average win sizes from $500 to $4,000, assuming an average loss of $1,000. It indicates negative expected returns mean the trader needs to increase their winning percentage or ratio of win to loss sizes to improve their odds.

Uploaded by

riddajeen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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Risk & Reward Worksheet

Questions:How big is your average loss (your risk per trade)? $2,000
What is the ratio of size of winners to losses? 0.5 <= For example, winning $1000 and losing $500 on average
Transaction costs (dollars)? $0 <= For example, assume $50 round turn commish + $50 slip

Ave. Win/Loss
Win Pct In Dollars
30 $1100.00
35 $950.00
40 $800.00
45 $650.00
50 $500.00
55 $350.00
60 $200.00
65 $50.00
70 $100.00
75 $250.00
80 $400.00

If "your numbers" are negative, you need to:


a) increase the size of wins to losses (let profits run)
b) increase the number of winners (buy low/sell high)!

*** It is easy to change these dollar amounts to percentages - see worksheet tab below.
1000 and losing $500 on average would give "2"
$50 round turn commish + $50 slippage = $100 transaction costs
Risk & Reward Worksheet

Questions: How big is your average loss (your risk per trade)? 1.00%
What is the ratio of size of winners to losses? 2
Transaction costs (as pct of account size)? 0.01% <= For example, assume a $100,000 account and $50 roun

Ave. Win/Loss
Win Pct In Percent
30 -0.11%
35 0.04%
40 0.19%
45 0.34%
50 0.49%
55 0.64%
60 0.79%
65 0.94%
70 1.09%
75 1.24%
80 1.39%

If "your numbers" are negative, you need to:


a) increase the size of wins to losses (let profits run)
b) increase the number of winners (buy low/sell high)!

*** It is easy to change these percentages to dollar amounts - see worksheet tab below.
a $100,000 account and $50 round turn + $50 slippage = 0.1% transaction costs
Probability of Ruin

The Matrix
What will you score; will you be "POR"?

PLEASE INPUT THE FOLLOWING VALUES:

Average Loss: $1,000 Each cell calculates: eg:


Starting Account: $5,000 a) Probability of Ruin x%
What is "Success"? $10,000 b) Average Trade (Expectation) $$$
What is "Failure"? $0
* Note: "Failure" must be less than "Starting Account" and "Starting Account" must be less than "Success"

Average Percentage of Winning Trades


Win 30% 35% 40% 45% 50% 55% 60% 65% 70%
### ### ### ### ### ### ### ### ###
$500 -$550 -$475 -$400 -$325 -$250 -$175 -$100 -$25 $50
### ### ### ### ### ### ### ### ###
$750 -$475 -$388 -$300 -$213 -$125 -$37 $50 $138 $225
### ### ### ### ### ### ### ### ###
$1,000 -$400 -$300 -$200 -$100 $0 $100 $200 $300 $400
### ### ### ### ### ### ### ### ###
$1,500 -$250 -$125 $0 $125 $250 $375 $500 $625 $750
### ### ### ### ### ### ### ### ###
$2,000 -$100 $50 $200 $350 $500 $650 $800 $950 $1,100
### ### ### ### ### ### ### ### ###
$2,500 $50 $225 $400 $575 $750 $925 $1,100 $1,275 $1,450
### ### ### ### ### ### ### ### ###
$3,000 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800
### ### ### ### ### ### ### ### ###
$3,500 $350 $575 $800 $1,025 $1,250 $1,475 $1,700 $1,925 $2,150
### ### ### ### ### ### ### ### ###
$4,000 $500 $750 $1,000 $1,250 $1,500 $1,750 $2,000 $2,250 $2,500

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Probability of Ruin

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