Wait, how does Alfa Edge Fund work?
To understand this, I will elaborate using examples how one grows a trading account in forex/Indices.
It only takes 20 pips per week .
It only requires 1.5% risk.
It only requires 1:1 Ratio Account: $1000.00 USD.
Risk per trade: 1.5% or $15.00 Risk 20 pips from entry price.
Profit taken at 20 pips for a 1.5% return.
Where do these setups occur?
Daily Charts Make It Easy, in Locating an Institutional Order flow, consider the example below.
Now before we delve any further, lets define some terms in this context.
Risk: The amount of money a trader decides to use as ‘stake’.
Reward: The amount of money a trader gets when their trade plays out.
Accuracy rate/Win rate: A traders potential or rather, how often their strategy plays out.
Reward to Risk Ratio: The number of times the staked amount is multiplied by when/if a trade set up plays
out.
In the example above, the trade set up has a Reward: Risk of 6.2. This means, for every staked $ a return of
$6.20 is expected.
Why Profits Are Achievable Despite Taking Reasonable Losses:
1) The Professional Equity Manager understands “Losses are costs of doing business.”
2) Using sound Equity Management & High Probability Setups yield handsome % returns.
3) Trading scenarios that encourage potential 3:1 Reward Ratios, provide initial foundation.
4) Defining Trade Setups that frame 5:1 Reward to Risk or more -efficiently cover losses.
Let’s consider the numbers:
a. A 30 % win rate and a 3R trade using a 1% risk per trade.
Wins Losses
30% 70%
3 Wins in 10 trades 7 Losses in 10 trades
Average Profit = $150.00 Average loss = $50.00
Sub Total =$450.00 Sub Total = $350.00
Account Size: $5000.00
Accuracy Rate: 30%
Reward to Risk Ratio: 3:1
Risk per Trade: 1%
Average Win: $150.00
Average Loss: $50.00
Net Profit = $100.00
A 2% Return.
b. A 30 % win rate and a 5R trade using a 1% risk per trade.
Wins Losses
30% 70%
3 Wins in 10 trades 7 Losses in 10 trades
Average Profit = $250.00 Average loss = $50.00
Sub Total =$750.00 Sub Total = $350.00
Account Size: $5000.00
Accuracy Rate: 30%
Reward to Risk Ratio: 5:1
Risk per Trade: 1%
Average Win: $250.00
Average Loss: $50.00
Net Profit = $400.00
An 8% Return.
c. A 30 % win rate and a 5R trade using a 2% risk per trade.
Wins Losses
30% 70%
3 Wins in 10 trades 7 Losses in 10 trades
Average Profit = $500.00 Average loss = $100.00
Sub Total =$1500.00 Sub Total = $700.00
Account Size: $5000.00
Accuracy Rate: 30%
Reward to Risk Ratio: 5:1
Risk per Trade: 2%
Average Win: $500.00
Average Loss: $100.00
Net Profit = $800.00
A 16% Return.
d. A 40 % win rate, 5R trades using a 2% risk per trade.
Wins Losses
40% 60%
4 Wins in 10 trades 6 Losses in 10 trades
Average Profit = $500.00 Average loss = $100.00
Sub Total =$200.00 Sub Total = $600.00
Account Size: $5000.00
Accuracy Rate: 40%
Reward to Risk Ratio: 5:1
Risk per Trade: 2%
Average Win: $500.00
Average Loss: $100.00
Net Profit = $1400.00
A 28% Return.
e. 50 % win rate, 5R trades using a 2% risk per trade.
Wins Losses
50% 50%
5 Wins in 10 trades 5 Losses in 10 trades
Average Profit = $500.00 Average loss = $100.00
Sub Total =$2500.00 Sub Total = $500.00
Account Size: $5000.00
Accuracy Rate: 50%
Reward to Risk Ratio: 5:1
Risk per Trade: 2%
Average Win: $500.00
Average Loss: $100.00
Net Profit = $2000.00
A 40% Return.
f. A 50 % win rate, 5R trades, using a 1% risk per trade.
Wins Losses
50% 50%
5 Wins in 10 trades 5 Losses in 10 trades
Average Profit = $250.00 Average loss = $50.00
Sub Total =$1250.00 Sub Total = $250.00
Account Size: $5000.00
Accuracy Rate: 50%
Reward to Risk Ratio: 5:1
Risk per Trade: 1%
Average Win: $250.00
Average Loss: $50.00
Net Profit = $1000.00
A 20% Return.
