Risk Reward Calculation

Bug reports and errors in the program
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Trader Robbie
Posts: 1
Joined: Sat Apr 17, 2021 12:29 am

Risk Reward Calculation

#1 Postby Trader Robbie » Sat May 01, 2021 3:37 am

Hi,

The Risk/Reward calculation should show 2.0 not 0.50 Is it a bag or am I missing some settings I have to adjust?

Risk Reward Calculation.JPG
Risk Reward Calculation.JPG (39.33 KiB) Viewed 18462 times

FX Helper
Posts: 1340
Joined: Mon Apr 01, 2013 3:55 am

Re: Risk Reward Calculation

#2 Postby FX Helper » Mon May 03, 2021 2:57 am

Hello,

Thank you for the screenshot.

It is not a bug, Risk/Reward tool is supposed to work this way in our program.

It shows Risk to Reward ratio.

According to your screenshot, Reward is bigger than Risk, that's why Risk / Reward is lesser than 1.

jasonp
Posts: 1
Joined: Wed May 19, 2021 9:59 am

Re: Risk Reward Calculation

#3 Postby jasonp » Wed May 19, 2021 10:21 am

Hello,

I agree with Trader Robbie here. The Risk to Reward Ratio should be displayed as a function of the Risk Taken; where the Risk Taken is always equal to 1R (1xRiskTaken). Therefore, if the projected reward is greater than the Risk Taken, the tool should display a number greater than one. Using Trader Robbie's example, the projected reward is 2R (2xRiskTaken), and the tool should therefore display Risk /Reward: 2. The function is displayed properly in the below example taken directly from the ForexTester Website. However, the calculation seems to be inverted within the program.
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Screenshot 2021-05-19 100853.jpg
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FX Helper
Posts: 1340
Joined: Mon Apr 01, 2013 3:55 am

Re: Risk Reward Calculation

#4 Postby FX Helper » Fri May 21, 2021 1:56 am

Hello,

Thank you for the suggestion.

As far as I know, our developers have decided to show the ratio as Risk to Reward.
Which means that if Risk is higher than Reward, then the value should be bigger than 1.

According to the screenshot from a website, Risk is 122 pips, while Reward is only 78, that's why Risk/Reward tool shows 1.56 value.

We will add an ability to change the tool and show an inverted value in the next program builds.

siboneloz
Posts: 1
Joined: Mon May 31, 2021 12:05 pm

Re: Risk Reward Calculation

#5 Postby siboneloz » Mon May 31, 2021 12:18 pm

FX Helper wrote:Hello,

Thank you for the suggestion.

As far as I know, our developers have decided to show the ratio as Risk to Reward.
Which means that if Risk is higher than Reward, then the value should be bigger than 1.

According to the screenshot from a website, Risk is 122 pips, while Reward is only 78, that's why Risk/Reward tool shows 1.56 value.

We will add an ability to change the tool and show an inverted value in the next program builds.


thank you very much for this. im in agreement with Trader Robbie. his correct R:R is 2:1 and not 0.5 as shown in the screenshot. i was also getting confused when testing the pending entries made with the R:R tool. i thought it was only doing it incorrectly on sell orders but looks like the tool also shows the incorrect R:R when doing buy orders as well

pic.png
pic.png (9.32 KiB) Viewed 16967 times

Swervo
Posts: 2
Joined: Sun Sep 19, 2021 1:33 am
Location: Brisbane Australia

Re: Risk Reward Calculation

#6 Postby Swervo » Sun Sep 19, 2021 2:35 am

Technically speaking the way the Risk/Reward is shown in the tool is correct.

For Trader Robbie's example the Risk to Reward ratio is 1:2 (i.e. Robbie risking $22 to make $44). 1 divided by 2 is 0.50 i.e. "Risk/Reward" means "divide Risk amount by Reward amount".
Or you can think of it as the Risk is only half of the Reward.

I think the way Risk to Reward is generally presented is actually showing Reward to Risk. And when people start talking about 2R (2 x Risk) etc just causes more confusion.

The example from Forex Tester website adds more confusion as it's showing the red Risk portion as smaller than the green Reward portion but as FX Helper pointed out the Risk is actually
122 points and the Reward is only 78 points. 122 divided by 78 is 1.56.

So maybe the tool needs to be changed to show "Reward/Risk 2.0" (for Robbie's case) etc. Or everyone just gets their head around the correct way of showing Risk to Reward ratio...

FX Helper
Posts: 1340
Joined: Mon Apr 01, 2013 3:55 am

Re: Risk Reward Calculation

#7 Postby FX Helper » Mon Sep 20, 2021 2:14 am

Hello,

Yes, the intent is to have two options in the program so each user can select whichever option suits for him better.

maryung
Posts: 3
Joined: Thu Jan 04, 2018 8:26 pm

Re: Risk Reward Calculation

#8 Postby maryung » Fri Oct 01, 2021 8:08 pm

When will this be fixed?
Can ForexTester do this right away?

FX Helper
Posts: 1340
Joined: Mon Apr 01, 2013 3:55 am

Re: Risk Reward Calculation

#9 Postby FX Helper » Mon Oct 04, 2021 3:27 am

Hello,

This will be fixed in the next version of the Forex Tester program as far as I know, it will be available soon.


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