I see some posts where users say, I am -1.87R in August, how does one calculate R ?
For example, in Nifty, my stop loss is 25 points, and reward is 100 points (its trailing stop loss, but lets stick to this for calculation). So if I in 10 trades, I am at 4 losses, and 6 wins, how do I calculate this ? or for vice versa too.
Thank you so much @Celina for the detailed explanation. So ideally one should have less losses like -1R,-3R,-5R and so on. And more profits like 5R,7R,10R and so on…so is there any ideal number where minus and plus R should go, and we can say the strategy is good ? maybe max -10R, but potential to go even +30R would be a net positive strategy ?
Van Tharp has written books on this concept, please go through them for in depth understanding. There are many things that come to light, when you read The turtles system, and Position sizing system. Elsewhere in QnA I explained how R works, how it can be used to make profit too.
It is an eyeopener. It is like sailing or surfing. When you catch the wave, make the most of it. It is refreshing to see the profits going up, up and away. It comes to taking the chances as many times as possible.