Kardec Trader explains why traders obsess over the wrong metric. A $48,000 profit looks great until you see the risk taken. The real measure is R multiple: profit divided by risk. In one trade, he made 4.2 R on 50% of his cash.
$48,000
About 4.2 R
About 50%
This is what I want to focus on. Get the 90 grand, whatever you guys see in the thumbnail, or $48,000, whatever it is, doesn't matter. What matters is what did Umar risk on this particular trade? Right? Because I could have risked a hundred thousand dollars on this trade, and I made 48,000. Now, that doesn't make it a good trade. That makes it a terrible trade. So every time you see any trades that you take, or any trader on YouTube, social media takes, the first question you should have is to understand how much did this person risk and where did they put their risk levels? Very important to understand. And once you understand risk levels, you'll understand to pay attention to our multiples. So basically, I made about 4.2 R. So I made 4.2 times what I risked on this particular trade. And based on my cash, invested about 50%. Right.
