Okay so I have a little bit of time so let's have a chat about R and most importantly why everyone who is claiming that they make 10-20R on each trade is either lying on they don't trade with any real money. /cont
first of all, this whole new wave of ICT traders that are recently coming on crypto Twitter and trade BTC don't understand how markets work in the first place, justifying every move as the evil intention of market makers is not how markets work and what market makers do.
The principle of why markets move and what role market makers actually do in the market is explained here - tradingriot.com
for those who don't know what R is, R is a measurement of how much you risk compared to what you gain. It helps you with your risk management and position sizing. If you buy BTC at 40k with stop loss at 39k and it hits your take profit at 42k you just made 2R as your R: R was 2:1
the real issue with these massive R trades comes in the execution if you are looking at daily or hourly timeframes. The opportunities to let your trades run for 10times or more of your risk are very rare and they take weeks to play out.
so most of these people you see on Twitter post 1 minute or sometimes even second charts that are of course always hindsight but let's give this the benefit of doubt for now.
If you are trading of such low timeframes there are plenty of opportunities to trade during the day. Here is an equity simulator with a 50% win rate which is doable for most discretionary strategies and a fixed 10:1 risk to reward ratio.
As you can notice after 500 trades, you are the richest man in the world. If you still are delusional and think this is something that is possible, let's talk about sizing and actual trading.
First of all, on lower timeframes, there is much more "noise" it's not actually noise, but the room for random wicks and spikes in price is much higher therefore your actual win rate will drop drastically I would say to around 10-20%
On this sheet shared by @Trader_Dante you can see that there is pretty much a 100% chance to have 11 and more losses in a row with this type of strategy, good luck not losing your mind during these prolonged drawdowns.
Another thing Tom shared is this example of a black swan in EURCHF. Since you are trading with such a tight invalidation and huge size any unexpected event will cause massive slippage which will pretty much clean your whole account.
The last thing is sizing itself, take a look at Bybit depth for BTCUSDT. If you take this trade on the second image on a 100k account with a 1% risk that has 0.1% price invalidation, you need to sell 23BTC this will of course cause slippage so it is not realistic trade to take
100k can still be considered modest account size but you can already see how these trades are just not possible to take in the real world.
To conclude this, don't trust people who larp online claiming they take these huge R trades on a daily basis because they are a) lying and b) most likely trade with very little money.
I have some blog posts about more of a realistic side of trading like this one about risk management tradingriot.com
last thing to add is focus on consistency and staying in trading for a long run. My average R is between 2-3 which is more than enough if you focus on high probability trades.
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