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Risk/Reward Ration-Why you should master the Act.

Nov 05, 2020 at 06:26
Przeglądane 1,214
22 Replies
forex_trader_1984295
Uczestnik z Oct 22, 2020   42 postów
Nov 05, 2020 at 06:26
What is risk and reward ration, and why you should master the Act.

Risk/reward ratio, an estimated measure of th profit potential per amount risked. For example a trader might use a 1:4risk/reward ratio meaning that they are willing to risk $1 to mak $4. Risk and Reward ration potentially give you a hedge to have the best Money Management with huge profits returns with time with very low drawdow.

If you can truly maintain this, you will be making profits with reasonable little risk and it one of the best way to be a profitable trader as it allows you keep making profits at a better ration. First time I started managing funds 20 years ago under a firm, that was where all the emphasis of trading was focus on, once you master the Act, you are a proffesional trader.
Uczestnik z Nov 23, 2020   15 postów
Dec 04, 2020 at 07:44
I try to keep my risk reward ratio 1:3 and always make sure that I am using stop-loss orders and derivatives such as put options.
Uczestnik z Jul 23, 2020   869 postów
May 07, 2021 at 22:43
It is essential to survive in the market. After all, it is a risky market.
Uczestnik z Mar 16, 2021   477 postów
May 08, 2021 at 00:54
If my strategy ever fails then the risk ratio helps me in my defense. So I always maintain a 1: 2 risk ratio and trade.
Uczestnik z Mar 28, 2021   617 postów
May 08, 2021 at 13:19
LyudmilLukanov posted:
It is essential to survive in the market. After all, it is a risky market.
Managing risk is the most significant yet ignored aspect in trading. I mean most of the traders don't have any risk management coverage. I don't risk more than 1 percent of my funds in one trade. If I start more than 1 trade my highest possible risk percentage is 2%.
Uczestnik z Jul 20, 2020   399 postów
May 09, 2021 at 10:25
Completely agree, it will make sure you are profitable. Its so important to have a positive RR
Uczestnik z Jul 19, 2020   751 postów
May 09, 2021 at 13:10
Yes finding the risk reward and winning percentage of your strategy is important. It gives you more confidence as you know more about your strategy.
Uczestnik z Jul 23, 2020   759 postów
Jun 04, 2021 at 14:33
It helps traders to stay in the business for long.
Uczestnik z Jun 30, 2020   90 postów
Aug 06, 2021 at 06:08
The correct approach is always a positive result and good income.
Uczestnik z Aug 15, 2020   8 postów
Oct 05, 2021 at 20:07
I actually believe that risk reward ration is the cornerstone to successful trading. It is impossible to be 100% right all the time, but even if you are 50% right, your trading may bring you decent profits.
Uczestnik z Oct 06, 2021   15 postów
Oct 06, 2021 at 04:49
They are quite useful in providing you a better profit in term of consistency, so it is always good to master them.
Uczestnik z Jan 22, 2021   125 postów
Oct 06, 2021 at 06:35
I keep my risk reward ratio to 1:5. There is no harm for getting 1000 when keeping 200 on risk.
Uczestnik z Jul 20, 2020   399 postów
Oct 06, 2021 at 07:06
blackChelsea posted:
I keep my risk reward ratio to 1:5. There is no harm for getting 1000 when keeping 200 on risk.

Thats the ideal i think between 1:3-1:5 but you have to have the mentality to deal with the losses as the is around a 55%-60% accuracy id say. What is yours like?
Uczestnik z Dec 13, 2018   6 postów
Oct 06, 2021 at 12:36
CraigMcG2020 posted:
blackChelsea posted:
I keep my risk reward ratio to 1:5. There is no harm for getting 1000 when keeping 200 on risk.

Thats the ideal i think between 1:3-1:5 but you have to have the mentality to deal with the losses as the is around a 55%-60% accuracy id say. What is yours like?

With a risk reward of 1:3 and a win rate of 55% you would be a excellent trader actually, and is very hard to reach.
You can be very profitable with a RR of 1:1.5 and a win rate of 50%
I think a lot of people have a completly wrong idea of what being profitable is. It is about being consistant in the long run.
A high RR combined with a high win rate is almost impossible. And anybody who is promising these crazy high win rates with crazy high RR is probably bullshitting.
Uczestnik z Mar 05, 2021   10 postów
Oct 06, 2021 at 20:24
The importantce of risk/reward ration cannot be overrated. It is an open secret that it is impossible to be 100% right about the market, that is why you definetely need to hedge your risks by your profits. In this case even if only 50% of your deals are successful, you will still have profits. That is quite a simple concept but it always works.
Uczestnik z Jul 20, 2020   399 postów
Oct 08, 2021 at 07:10
Wiljanvh posted:
CraigMcG2020 posted:
blackChelsea posted:
I keep my risk reward ratio to 1:5. There is no harm for getting 1000 when keeping 200 on risk.

Thats the ideal i think between 1:3-1:5 but you have to have the mentality to deal with the losses as the is around a 55%-60% accuracy id say. What is yours like?

With a risk reward of 1:3 and a win rate of 55% you would be a excellent trader actually, and is very hard to reach.
You can be very profitable with a RR of 1:1.5 and a win rate of 50%
I think a lot of people have a completly wrong idea of what being profitable is. It is about being consistant in the long run.
A high RR combined with a high win rate is almost impossible. And anybody who is promising these crazy high win rates with crazy high RR is probably bullshitting.

Yeah completely agree. A sure fire way to know a fake guru is high accuracy and RR. 55% isnt sexy but will make you profitable
Uczestnik z Apr 09, 2019   538 postów
Oct 08, 2021 at 10:22
For sure. Hate seeing these promises of 95%+ accuracy as you just know it's a scam and that there are some poor saps out there that get drawn in by it.
If you can't spot the liquidity then you are the liquidity.
Uczestnik z Jun 14, 2021   53 postów
Oct 15, 2021 at 10:27
No one can be right every time. However the risk-reward ratio can be used to make decent profits from the Forex market.
Uczestnik z Jun 09, 2021   44 postów
Oct 27, 2021 at 03:56
In order to manage the risks and save the trading capital, risk/reward ratio is vital to use. The optimal RR ratio differs widely among different strategies but a ratio of 1:3 is generally considered good for all the traders.
Uczestnik z Oct 17, 2018   103 postów
Oct 30, 2021 at 17:48
No trade is ever a certainty. You need to have a good RR ratio to ensure that you minimise your risk. I only risk 1-2% of my account in any one trade. I like to keep my ratio at 1:3. Without that risk management it is too easy to blow your account or make much higher losses.
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