Get Tability: OKRs that don't suck | Learn more →

2 strategies and tactics for Risk To Reward

What is Risk To Reward strategy?

Every great achievement starts with a well-thought-out plan. It can be the launch of a new product, expanding into new markets, or just trying to increase efficiency. You'll need a delicate combination of strategies and tactics to ensure that the journey is smooth and effective.

Finding the right Risk To Reward strategy can seem daunting, particularly when you're focused on your daily workload. For this reason, we've compiled a selection of examples to fuel your inspiration.

Copy these examples into your preferred app, or you can also use Tability to keep yourself accountable.

How to write your own Risk To Reward strategy with AI

While we have some examples available, it's likely that you'll have specific scenarios that aren't covered here. You can use our free AI generator below or our more complete goal-setting system to generate your own strategies.

Risk To Reward strategy examples

You will find in the next section many different Risk To Reward tactics. We've included action items in our templates to make it as actionable as possible.

Strategies and tactics for implementing a profitable nifty option buying strategy

  • ⛳️ Strategy 1: Use moving average crossover strategy

    • Identify the appropriate fast and slow moving averages for crossover signals
    • Track the nifty index for crossover signals on the identified moving averages
    • Confirm trade signals with additional indicators like RSI or MACD
    • Set the entry point on the next candle after a crossover signal
    • Define the risk-to-reward ratio as 1:3 for every trade
    • Place a stop-loss order at a level that represents the defined risk
    • Set target prices at three times the risk amount from the entry point
    • Monitor trades closely for profit-taking when conditions are met
    • Adjust moving average parameters periodically based on market conditions
    • Back-test the strategy on historical data to ensure its effectiveness

  • ⛳️ Strategy 2: Employ support and resistance strategy

    • Identify significant support and resistance levels on the nifty chart
    • Use price action to confirm robustness of these levels
    • Place buy orders near support levels with confirmed bullish reversal patterns
    • Set stop-loss orders below the identified support levels
    • Define the risk-to-reward ratio as 1:3 for each trade
    • Establish target prices at three times the distance from the stop-loss
    • Use oscillators like RSI to confirm oversold conditions at support
    • Monitor market news that might affect support and resistance effectiveness
    • Adjust support and resistance lines as the market continues to develop
    • Regularly back-test and refine the strategy to improve accuracy

  • ⛳️ Strategy 3: Utilise volatility breakout strategy

    • Determine key volatility indicators such as ATR (Average True Range)
    • Set criteria for entry based on significant increases in volatility
    • Position buy orders during periods of breakout with high volatility
    • Place stop-loss orders at a safe distance, incorporating ATR calculations
    • Define a 1:3 risk-to-reward ratio for setting up target prices
    • Exit positions as prices approach thrice the risk amount
    • Avoid trading during low volatility sessions when conditions aren't met
    • Use historical volatility patterns to forecast future breakouts
    • Stay updated with macroeconomic news that might trigger volatility
    • Reassess the strategy regularly to ensure sustained profitability
risk-to-rewardindicatorstraderstrategisttrading-deskrisk-management-team
Implement these strategies

Strategies and tactics for developing a Profitable Day Trading Strategy

  • ⛳️ Strategy 1: Adopt the EMA Pullback Method

    • Set up 9 EMA and 21 EMA on your trading charts
    • Choose assets that are highly liquid such as major forex pairs or SP500 futures
    • Monitor the 5-minute chart actively during the highest liquidity hours for your chosen market
    • Identify the trend by ensuring the price is above both 9 EMA and 21 EMA for a bullish trend
    • Wait for the price to pull back to the 9 or 21 EMA in the direction of the trend
    • Confirm an entry using volume spikes on breakout candles and bullish candlestick patterns
    • Place a buy stop order above the high of the pullback candle
    • Set a stop loss below the recent swing low or use 1.5x ATR for volatility adjustment
    • Establish initial profit targets at 1:1 risk-reward ratio and adjust as needed
    • Ensure total exposure to risk per trade does not exceed 1% of your account balance

  • ⛳️ Strategy 2: Utilise Effective Risk Management

    • Define your maximum risk tolerance per trade and systematically adhere to it
    • Set a daily maximum loss cap at 2% of your account balance to cease trading if reached
    • Implement position sizing methods to ensure capital preservation
    • Avoid trades during major scheduled news events to manage unexpected volatility
    • Utilise ATR to determine the appropriate market conditions and avoid low volatility trades
    • Confirm that higher timeframe trends align with 5-minute chart setups for consistency
    • Exclude trades in markets deemed to provide choppy or unclear signals
    • Define clear conditions under which you will avoid or limit leveraged trades
    • Backtest risk parameters on historical data and adjust accordingly
    • Evaluate overall performance monthly and recalibrate risk strategies if necessary

  • ⛳️ Strategy 3: Maintain Trading Discipline and Setups

    • Create a predefined trading plan specifying entry, exit, and stop criteria
    • Document every trade in detail for subsequent analysis and learning
    • Restrain from making impulsive decisions and overtrading throughout sessions
    • Monitor psychological aspects such as greed or fear which affect decision making
    • Focus only on high-probability setup opportunities termed as A+ setups
    • Commit to frequent review of strategy effectiveness and adaptability
    • Ingrain a structured routine to aid consistent and disciplined trading practices
    • Use mechanical aids like hotkeys to ensure swift execution during peak moments
    • Engage in strategy optimisation based on observed performance and market shifts
    • Develop coping strategies to manage emotional stress and minimise revenge trading
scalpingtechnical-analysisday-traderrisk-managertrading-teamrisk-management-team
Implement these strategies

How to track your Risk To Reward strategies and tactics

Having a plan is one thing, sticking to it is another.

Don't fall into the set-and-forget trap. It is important to adopt a weekly check-in process to keep your strategy agile – otherwise this is nothing more than a reporting exercise.

A tool like Tability can also help you by combining AI and goal-setting to keep you on track.

More strategies recently published

We have more templates to help you draft your team goals and OKRs.

Planning resources

OKRs are a great way to translate strategies into measurable goals. Here are a list of resources to help you adopt the OKR framework:

Table of contents
Copyright © 2024 Tability