1:1 Risk/Reward Frowned Upon?

1:1 ratio is very good. psychologically best for those trader who always want to exit in small profit.

For Risk Reward Ratio is the agreed nomenclature 1:3 ? Risking 1 to make 3.
How are you guys getting 3:1 and still being consistently profitable with >=25% win rate?

I jest, however you make money good for you. 75% of traders don't.

I think he was talking about odds. Odds of 3:1 means you have 3 chances of loosing and 1 chance of winning.
So 4 chances altogether, with 1 chance of winning ie 25%.

Personally, I believe 1:1 is the best R:R. Look at it this way, betting a win in a soccer match is 33% But the odds of one betting ANY soccer game to have both sides corner kicks is above 95%, that's why the rewards on it is minimum, thus In trading, if you play the most obvious odds, you will when more. For you to understand more, rather back test it on 15 and above on especially EU. You will see that you can when 9 out of 10. The secret is not on RR but on Risk. HOW MUCH DO YOU RISK ON A SINGLE TRADE. If you have a 1000 dollar account and you risk 10% to get 100, it's OK now imagine with 100k account with a probability of 80%.

Now imagine 1:0,5

There is a mathematician who passes RR of 1:0,1... He has never lost. The bigger the account the bigger the 0,1.

The way you can earn more is to risk the obvious daily.

Hey all,

They only thing you can control with a good amount of certainty is risk. You can pretend to have a goal but you get what the market gives. Depending on the trading strategy and money management scheme you developed, setting TP or using TS can be a goal. However, using a static RR number or % does not make any sense to me. However, this is one of the biggest discussions in trading, where to get out.

- Ric

I get what everyone's saying and it makes sense,
But what if I place my stop at an appropriate place (a place where my strategy is invalidated, the definition of where to place a stop) but then to make my RR 1:2 I have to place TP at a completely inappropriate place where I don't think price will reach?
Do I place my TP at an unrealistic place to make my RR 1:2?
OR
Do I put my TP at a reasonable place I think price will reach? but this would make my RR lower then 1:2


For example I would rather put my TP at 0.8520 instead but then the RR would not be 1:2

Any guidance?

Hi ccrkk10!

You have raised very interesting questions and your doubts are justified.
The answer is that 99% are not traders. They hear/read fairy tales and repeat them like parrots. Fixed RR cannot and will not work because markets doesn't care what you dream about.

If you check FF there are no traders with less than 85% winrate. They earn 5-6% daily and can open >100 lot size positions. So why not to believe in risk-reward ratio?