Welcome to our MetaTrader 4 Hacks series of blog posts, where we look to get the most out of the Vantage FX MT4 platform for our clients. In this first blog, we’re going to look at how we can visually display a risk:reward ratio tool in MT4.
What is the Risk:Reward Ratio?
The risk:reward ratio is the calculation of how many pips you’re willing to risk in a trade, versus how many pips you’re aiming for as your profit target.
In order to keep things simple for you here, if you set your stop loss at 10 pips and targeted 30 pips, then your risk:reward ratio would be 1:3. That is, you’re risking 1 unit to make 3 units.
To learn more about the theory behind risk:reward ratios, check out our forex risk:reward and win rates lesson.
The Risk:Reward Tool in Action
Now many of our traders already us the online TradingView charts alongside their Vantage FX MT4 platform and the question of how to display risk:reward like they see on TradingView often comes up. This is the TradingView risk:reward tool that we’re referring to:
As you can see, this tool shows your risk:reward ratio with your take profit and stop loss levels, clearly on your chart.
While the MT4 platform doesn’t directly offer a risk:reward tool like TradingView, we’ve come up with a MetaTrader 4 hack for you to create your own. Take look at our own hacked MT4 risk:reward tool:
How to Visually Display Risk:Reward Using the MT4 Fib Tool
1. Click the Fibonacci tool in the MT4 menu bar.
2. Drag it anywhere onto your chart then right click and select Fibo properties.
3. Delete all Fibo levels and replace them with the following list:
|0||Stop Loss – %$|
|0.5||-0.5 RRR – %$|
|1||Entry – $%|
|1.5||0.5 RRR – %$|
|2||1 RRR – %$|
|2.5||1.5 RRR – %$|
|3||2 RRR – %$|
|3.5||2.5 RRR – %$|
|4||3 RRR – %$|
4. Drag the star of your fib from your entry to your stop loss level.
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Source: Vantage FX Blog