The problem with using R/R (reward/risk BTW when expressing it as 2/1, 3/1, 4/1 etc) is that price doesn't know or care where any one individual trader's stop loss, trailing stop or profit target is. Profit targets are determined by what price does obviously, not where a line on a chart is placed.
Its all well and good to shot for a 2/1, 3/1, 4/1 ratio but what it really comes down to is to have price go the direction you expect it to - for as long as possible. How far is anyone's guess. If it hits a target good. If it doesn't so what, and what a trailing stop is for.
"Guess" right enough times direction and stop placement you'll come out ahead.
Now as for squiggly line moving averages, don't get me started.
Its all well and good to shot for a 2/1, 3/1, 4/1 ratio but what it really comes down to is to have price go the direction you expect it to - for as long as possible. How far is anyone's guess. If it hits a target good. If it doesn't so what, and what a trailing stop is for.
"Guess" right enough times direction and stop placement you'll come out ahead.
Now as for squiggly line moving averages, don't get me started.
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