Anyone seen a study of EMini price action analyzed to determine the optimal Risk/Reward ratio ?
I've heard 2:1 is popular, but shouldn't that be adjusted for volatility and/or trading performance ?

stanowen 

As a newer-ish trader I'm trying to develop a mechanical (fixed) risk to reward structure that's realistic with what the market is able to provide. If you're a consistently profitable trader in the e-mini's, can you please answer the following questions? 1. Do you trade with a fixed risk to reward structure? i.e. entering trades that always risks 4 ticks for 8 ticks. Or do you calculate position sizing for each trade? (the reason I ask is because on short time frames it's impossible to calculate position size for each trade, there just isn't enough time before the market has already moved) 2. What time frame, volume, range, or tick chart do you use to trade the e-mini's? 3. How many ticks do you risk? how many ticks is your take profit set at? Am I going down the wrong path by constraining myself to a fixed tick based risk to reward structure?

Trading the Nasdaq 100 e-mini, I start out with a 120 tick stop and target. I will adjust the stops and targets depending on the time of day, price/action, size of the previous candlesticks. I try to stay with the original goal as much as possible, sometimes more of an open target in the 60-100 point range, moving the trailing stop to above or below a large previous candlestick, or a smaller 10-30 point target in the more narrow day range choppier trading.

Five minute candlestick chart for trading.

I would look to be more flexible in your targets. Target price and stops should be about the same. I will average out the previous three hi/lo day session ranges to give me an idea how far the market may go.

Thanks for the interesting post.
I understand your point r.e. tick charts, but one advantage they have is that they show volume as well as the speed/ volatility of a move. It's why I no longer use volume charts despite the clarity they provide otherwise (levels etc).
You mention that you adjust your volume charts, how do you manage to resd/ comprehend when large volume is entering the market and prices are reacting rapidly? Do you just cross reference with a normal time based chart with a traditional volume indicator?
I drill down all the way to 5 sec charts for normal trading days, then tick charts for major news.

Tymbeline 

I suppose I’m just about in that group, but you’re going to get other/better/different responses from people with much more experience and success under their belts than I have, and you should read my replies knowing that. Generally not. Largely because my trading is mostly trend-following, and it goes against the grain (for me, anyway) to trade with fixed targets (at least for the whole position, it does), when you’re following a trend. So it depends on what kind of trading you do, surely? Again, generally not. Mostly because I like my stop-losses and targets (if any) to be as closely volatility-related as possible. That’s my experience, with fast trading, too. I completely agree. I don’t use timed charts. I use constant-volume bars and adjust the chart-speed to the volatility, in accordance with my risk management parameters. I work everything out "backwards" (some people would say) from risk management parameters. I look first at what I can afford to lose and how often, given what I'm doing and my degree of risk-aversion, before thinking about stop-losses, targets and position-sizes. In my opinion (though I might ruffle some feathers, saying this), almost everyone using tick charts is actually using them (knowingly or unknowingly) as a kind of "approximation" of constant-volume charts, anyway, so why not just use those instead? (Is how I look at it.) It depends what I’m doing, but I don’t like the initial stop-loss (which in my case is often the “fixed stop-loss” too, for at least part of the position-size) to be less than twice the ATR and I’m more comfortable with 2.5 times the ATR. I strongly disagree with the advice (widely expressed in trading forums, though a little less widely here than elsewhere) that you shouldn’t trade with a reward-to-risk ratio of less than 2.0. I even strongly disagree with the advice (even more widely expressed in trading forums, though also a little less widely here than elsewhere) that you shouldn’t trade with a reward-to-risk ratio of less than 1.0. I think it depends what you’re doing. I sometimes see people saying (in Journals, or wherever) that their stop-loss is twice the distance of their target, and inevitably there’ll be one or two responses saying things along the lines of “Are you sure that shouldn’t be the other way round?” and even “You’ll be better off reversing that”. I think these responses are very often mistaken. My point is no more complicated than that a high “R” goes with a low win-rate, and that can be very difficult for inexperienced traders to handle. Sometimes (maybe “often”) so much so that that alone prevents their progress, in practice. You have to learn all this stuff, in its relevance to your own trading, by testing it on your own trading. There’s no “one size fits all”. There are too many variables. I don’t know. It depends on exactly what you’re doing, and it’s really difficult to advise people without knowing that, and in detail.