Risk Reward Ratio
Overview
Built on top of the Volatility Based Support & Resistance indicator, the Risk Reward Ratio calculates a unique measure of the potential long reward and long risk at any given time based on volatility.
The tool was developed by Northington Trading, LLC and is only available in Optuma as an optional add-on module. Please visit the Tool Store to add to your copy of Optuma.
For Kirk Northington’s articles on volatility see here.
For an interview with Kirk Northington click here.
To add the tool to your chart, select the tool from the ND Research tool group, and left-click on the chart to add the tool. Optuma will then draw the tool in a window below the chart using the default settings.
Scripting Function: RRR()
Actions & Properties
Actions
Add to Toolbar: Adds the selected tool to your custom toolbar.
Apply Settings to All: When multiple Risk Reward Ratio tools have been applied to a chart, page or workbook, this action can be used to apply the settings of the one selected to other instances of the tool. This is a great time saver if an adjustment is made to the tool - such as line colour - as this allows all the other Risk Reward Ratio tools in the chart, page or entire workbook to be updated instantly.
Copy Tool: Allows you to copy the selected tool, which can then be pasted onto a different chart window.
Move to Back: If the tool is displaying in front of other tools or indicators clicking this action will move the tool view to the background.
Move to Front: If the tool is displaying behind other tools or indicators on the chart, clicking this action will bring the tool to the forefront.
Restore Default Settings: Click this action if you have adjusted the default settings of the tool, and wish to return to the standard properties originally installed with Optuma.
Save Settings as Default: If you have adjusted any of the tool’s properties (colour, for example) you can save the adjustments as your new default setting. Each time you apply a new Risk Reward Ratio to a chart, the tool will display using the new settings.
Delete: Deletes the tool from the chart.
Properties
Tool Name: Allows you to adjust the name of the tool, as it’s displayed in the Structure Panel.
Reduce Band Sensitivity: When enabled, the band sensitivity for the Risk Reward Ratio is reduced.
Sensitivity: Allows you to adjust the sensitivity value for the Risk Reward Ratio, the default value is 5.
Line Width:** Allows you to adjust the width of the line for the tool. Moving the slider bar to the right increases the thickness of the line.
RR Ratio Basis: Allows you to adjust the ratio basis to either Long or Short.
Up Colour: Allows you to select the colour of the Up line. Clicking on the drop down arrow will display a colour swatch. Locate the desired colour and left-click it once to select it.
Down Colour: Allows you to select the colour of the Down line. Clicking on the drop down arrow will display a colour swatch. Locate the desired colour and left-click it once to select it.
Offset: Moves the tool forward or backwards in time. The offset is measured in bars, so a value of 2 will push the tool forward 2 bars and -2 will move the tool back 2 bars.
Tool Transparency: Use this slider bar to adjust the transparency of the tool. Moving the slider to the left will increase the transparency of the tool.
Visible: Un-tick this checkbox to hide the tool from the chart.
Show In Price Scale: When selected the current Risk Reward Ratio values will be displayed in the Price Scale.
Disclaimer
*Trading in derivatives, equities or any security carries substantial risk of financial ruin. While the methods provided by ND Research attempt to limit risk, risk cannot be fully mitigated by any strategy. It is critical that you understand your own tolerance for risk and operate within those boundaries. Unless you satisfy the criteria as a “Sophisticated Investor” or are a Professional in the financial industry, you must consult your financial adviser to determine if these tools are suitable for you.
Market Analyst International, ND Research and their respective employees, agents and affiliates are not liable in any way for any loss, damage- including special, indirect or consequential damages, claims or costs of any kind including but not limited to any loss of income, business or profits or loss, sustained and arising out of or in connection with use of the Optuma program or the ND Research tool set.
In providing you with access to any of the add-on tools from ND Research, neither Market Analyst International or ND Research are providing you with any advice of any nature, including, without limitation, investment advice. In respect of any Services or Content containing investment information, we are not communicating invitations or inducements to enter into investment agreements.*