Disliked{quote} Don't understand half of what you have posted. Leverage is important and how much is used of balance per lot size. That is understandable. But this make no sense at all: " If that trade dont have 1:2 risk reward, then dont take that trade." Basically how do you know the outcome of every trade to apply risk reward before placing a order?Ignored
However a risk reward ratio does NOT provide you any guarantee to stay profitable or break even with time. First you canīt forecast that every trade hits your profit target level and so you will have trades you close earlier (making this risk/reward ratio invalid).
Also if you end up with a long drawdown period by one losing trade after the other it makes your holy grail risk/reward ratio needless too.
But generally he is right with his statements. Lets assume you always trade 1 Lot per Trade risking max. 10 Pips and you win only 50% of the time.
Example:
Losers: 50 x 10 Pips = - 500 Pips (-$5.000 USD)
Winners: 50 x 20 Pips = 1000 Pips (+$10.000 USD)
So after 100 trades even if half of them are lost but on average hitting your 20 Pips Profit Target you end up with some profits to your account.
Even if you below 50% successfull you could end up profitable like that.
Because of this simple mathematical "edge" professional traders or lets better call them "portfolio managers" make profit in the long run and 90% retail traders blowing up their account within 90 days because not managing their risk/reward properly.
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