Chart of the Day (EB7UG)

1. Short entry above 850 around 12:00. Initial stop below 853. Exit near close below 840 for +3.5R.

Chart of the Day (ES7UG)

1. Long entry below 1,520 around 11:30. Initial stop above 1,518. Exit above 1,522 for +1R.

Chart of the Day (EB7UG)

1. Long entry below 830 around 10:30. Initial stop above 828. Exit near close above 844 for +7R.

Comparing Trade Quality with R

In the context of my trading system, R measures the initial risk exposure and maximum loss per trade. R is typically 1% of portfolio size in my trading system.

A return of -1R indicates that a trade was closed at the initial stop for maximum loss. A return of 2R means that a trade was closed for a gain of twice the initial risk exposure.

The beauty of using R is that I can directly compare the quality of my trades across different instruments. R is a return to risk ratio. A trade with a return of 3R is better than a trade with a return of 2R in any instrument.

Chart of the Day (ZG7Q)

1. Short entry above 648 around 10:15. Initial stop below 650. Exit around 645 for +1.5R.