Resolved Question
Hi there guys, i have been tweeking my trading system. i am profitable but my risk/reward is only 1.4:1, i am
over 2 years ago
Best Answer - Chosen by Voters
It would be advisable to have a risk/reward ratio that is at least 1:1 but that is under the assumption that you win only half your trades. As long as your winning percentage is high enough to make your profitable, then it would be okay to have a 1.4:1 risk reward ratio. I would also suggest trying to break up your trade into having multiple positions so that once your first TP is hit, you can try to see if you can get more profit on the trade while locking profits by moving your stop loss to your entry point. This way, you can try to take advantage of those trades that really go your way! Just give it a try and see if it fits your system. Good luck!
over 2 years ago
Answers (2)
It is always best that you get compensated at least by the same amount of what you are risking. Meaning, you should have at least a reward to risk ratio of 1:1. Though, sometimes it is okay to have a lower reward to risk ratio if say you're scalping. Having a smaller reward:risk ratio when scalping allows you to capitalize on small price changes while giving your trade enough breathing room to pan out.
over 2 years ago
* You must be logged in to add comments. Sign In or Join Askpips.com.
As long as you're profitable, there's nothing wrong with having a risk-reward ratio like that. At the end of the day, having a risk-reward ration below 1:1 is merely a GUIDELINE and not an unbreakable rock solid rule. Keep up the good work!
over 2 years ago
* You must be logged in to add comments. Sign In or Join Askpips.com.
Resolved Questions in Risk Management
- What is the importance of stop loss?
- Do you think these ideas really work in forex trading?
- Should younger investors risk more money in investments rather than those who are nearing their retirement age?
- Optimum account risk?
- I’ve been trading for 5 months and unfortunately I’m still trading with 1 lot.
* You must be logged in to add comments. Sign In or Join Askpips.com.