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1:1 Risk/Reward Frowned Upon?

  • #121
  • Sep 30, 2024 11:54am Sep 30, 2024 11:54am
Quoting Quickly
{quote} The correlation is inverse, not direct (but I think that’s what you meant, really, and if so you’re entirely correct ). {quote} This (like so much else you've posted) is just nonsense.
I think so...
  • #122
  • Oct 2, 2024 1:10am Oct 2, 2024 1:10am
Quoting YoMoney
Знаете, когда говорят, что никогда не следует торговать без стоп-лосса? Они правы, но я бы также...
You also need to be able to use a trailing stop. And here, I suppose, a lot depends directly on the trading system itself, on the input signals that it gives, on the timeframe on which it is used. DEPENDS on the conditions provided by the broker. In general, I don't see much point in putting a trailing right away. I tried it. In history, it turns out to be a loss anyway. Maybe it's just me. But if you put it in the area where the take was planned, then maybe something will come of it. I think.
  • #123
  • Nov 1, 2024 3:00am Nov 1, 2024 3:00am
you guys should back test different strategies with different money management setting to see what actually works.

tell your strategy to chatgpt and it will code it for you....then see what make a difference and what not etc....
  • #124
  • Sep 10, 2025 6:37am Sep 10, 2025 6:37am
To my understanding, talking about a risk rewards ratios I conversely choose 1:1 if there's a shift in the price or noise in the market. Some traders doesn't know that we can customize boilinger band to get a ratio of 5:3:3 where a traders can select a take profit and stop loss and manage his or her own risk.
  • #125
  • Sep 16, 2025 3:02am Sep 16, 2025 3:02am
I think the 1:1 risk/reward ratio is often frowned upon because it doesn’t maximize potential returns for the same level of risk. In trading or investing, many believe that aiming for a higher reward-to-risk ratio, like 2:1 or even 3:1, is more effective in the long run. With a 1:1 ratio, you'd need to be right 50% of the time just to break even, and that can make it harder to be consistently profitable.
Of course, it depends on the strategy and the individual’s risk tolerance. For some, sticking to a 1:1 ratio might feel safer, especially in volatile markets. It’s all about finding the right balance between risk and reward that aligns with your goals and comfort level. What do you all think? Would you stick to 1:1, or do you aim for higher returns to justify the risk?
  • #126
  • Sep 20, 2025 2:12pm Sep 20, 2025 2:12pm
It depends also what timeframe picked and what focus the trades have. It make a difference if you scalp or you trade goes for days/weeks.
Perfection is the enemy of good enough!
  • #127
  • Sep 21, 2025 1:19am Sep 21, 2025 1:19am
Quoting ankit011
IWhat do you all think? Would you stick to 1:1, or do you aim for higher returns to justify the risk?
R-multiple doesnt matter. Over a large enough sample set, a 1:0.5 will be 67/33, 1:1 will be 50/50, 1:2 will be 33/67, & 1:3 will be 25/75. The lower the R-multiple , the more trades. Which is why a counterparty broker wants their clients to pursue larger R:R so theirs will be a diversified portfolio of sub-1 trades.

The difference will be the distribution of wins and losses. A 1:3 that goes W-L-L-L-W-L-L-L-W-L-L-L is easier to quantify and profit from than a 1:1 that goes W-W-W-L-L-L-L-L-W-W.
ForexOrderFlow.com Return This Year: 10.2%
  • #128
  • Sep 21, 2025 10:31am Sep 21, 2025 10:31am
You can't go with a fixed rule in trading! Sometime you’ll expect such big volume in NY session, since the London market was full of volume; but when you joined the party, you’ll see all of sudden, the volume is vanished!

So in this type of situation, you can’t go with a fixed risk reward ratios rule; market doesn’t care us, and our rule; we have to care about the market; so when I see the momentum is gone, I immediately close my running trade, even in the breakeven; I know all of my trades are not only for profit!
For Gold, NY session offers superior tradability compared to London.
  • #129
  • Sep 21, 2025 10:32am Sep 21, 2025 10:32am
The higher you will target a multiple profit, the amount of reaching it will also decrease.
On the other side you trade around a negative risk/reward one loss take multiple trades to take you to zero.

You can calculate it in every corner with no clean picture.
It depends what market is traded, what influences build moves, what time frames visible build market participants roads.

Deep understand your instrument of choice and be flexible enough with your strategy to follow the once who you can not beat with trades against them.
Perfection is the enemy of good enough!
  • #130
  • Last Post: Sep 21, 2025 2:28pm Sep 21, 2025 2:28pm
Quoting ccrkk10
Hello all. It seems that the trading community as a whole is widely against using a 1:1 risk/reward ratio and constantly preaches to aim for at least a 2:1 ratio whether it be on forums, youtube videos, chat rooms etc. I recently started thinking why is this the case? I personally come from a blackjack card counting background. At the very best counters will get a 3% edge over the casino (win about 53% of the time). Sports bettors are considered amazing if they can hit at a 55% rate and are legendary if they can get 60%. There are plenty of people...
The answer on all of that depends on your system.
If you aim for 1:3 you`ll get less trades, but if you trade various pairs and time frames there may be enough signals to trade.

That said 1:1 can be a better deal than 1:3.
If 70% of 1:1 trades are winners and 30% of the 1:3 trades are winners then the 1:3 trades suddenly sound a lot less appealing.

Personally I add another rule: A minimum profit $ profit target. $10 profit is`t worth my time, even if the risk is 30 cents.

I don`t want more than 3 to 5 open trades (depending on the speed of action).
So I simply aim for higher and higher R/R until the number of trade signals drop, but I still get enough signals.
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