Is this a good R:R Ratio?

Hi traders,

I'm using a breakout system on the daily basis. I open 2 x 3 positions in each direction (high and low). I have a Return / Risk Ratio that I would have some comments on.

1. Trade: TP: 15 ; SL: 25
2. Trade: TP: 25 ; SL: 25
3. Trade: TP: open ; SL: 25

So I risk 75 pips with these 3 Trades and I get at least 40. But I wanted to catch the bigger Breakouts, so I left the last trade open. At the end of the day I will close all trades and also the third one.

Is that a good R:R or should I avoid these kind of R:R? Usually it should be 1:1, I know but how about this one? Fact is that I can catch large trends and that sometimes the third one could get 150pips or so.

Hope for your comments, opinions and critism.

Happy Trading

any comments?

It's a personal thing...if you're comfortable exposing yourself to that kind of risk, then go for it. Personally, my SL depends on the situation, but i always aim for reward>risk. I'd rather have 1 winner make up for several losers than have 1 loser wipe away several winners.

Damn the torpedoes.

Hope your sonar is in full sync...

Hi Marcel,

You will need to consider the volatility of the timeframe (which i assume is smaller intraday), its daily range and micro volatility. As an example, compare the vol on the hourly of the GBPUSD vs the AUDUSD, it can be considerable, thus will produce different results if using the same parameters. Furthermore, this will change depending on the market environment (high vol vs low vol), because the environment is not constant, as is your risk parameters. Risk is determined by position size in relation to stop price. Such a method needs to be adjusted to ccy pair, vol, time of day and risk levels. Hope that helps.