Risk Vs. Reward

I want to get some opinions on my risk vs. reward strategy. When I trade I think of my risk vs. reward in terms of 1R. I learned this from "Trade your way to financial freedom." When I take a trade I set my stop at 1R. From there I set a target at somewhere a little above 3R. This way if I have 1 in 3 profitable trades I make money.

Here is my dilema. Usually once my trade has moved 1R in my favor I move my stop to break-even. This way I have a free trade no matter what happens. However, this has the tendency to stop me out more often on a retracement before my target has been hit.

I am debating whether I should just keep my stop and limit the same throughout the trade or trail it by 1R like I have been. I can't really determine which will be better. I am leaning toward continuing what I have been doing.

If I don't move my stops, I will be stopped out with a loss more often but also hit my targets more often after a retracement. If I continue my method I lose a lot less, but limit my gains somewhat.

Opinions?

I suggest you practice on paper without making real trades because even with demo people naturally have the tendency to be greedy and afraid of losing.
What you need is a realistic evaluation if your system can work with that kind of profit objectives.
In my experience all these books are mostly nonsense about 3 to 1 ratio. In reality it is not realistic to achieve because of emotional issues as well as profitability.
It also depends which instruments you trade. If you do certain currencies, then I think trailing stops are necessary. Currencies have the tendency to move for prolonged periods of time without any real direction that can easily be determined without a good understanding of fundamentals.
In commodities, market can move in one direction for a significant amount of time so this kind of strategy is more realistic to work with.

From you description it would appear that you are entering near an old support/resistance level that the market seems to want to come back to and retest. I don't know if this is true or not but you would be able to tell if the market continues your original direction after stopping out.

You might want to try dividing your trade into two halves. Once you've reached your "1R" level take profit on 1/2 your position. Then your can move you stop up to break even and let the rest ride or stop out as the market may move. While this would reduce profit on those times when the market does reach your goal...it will also provide some small profit when the market makes it available instead of a break even or loss trade.

Another idea would be to lock in 2/3 of your profit after the original "1R" level. This would make your stop slightly below the entry point but might avoid a premature stop out and still provide profit in the event the market goes against you.

Think about it

Keep doing it, you're in learning now, as long as you can survive

WHY Guess?
Take a look at your previous trades...what percentage continue to your TP after you get stopped out? If your stops are consistently too tight on winning trades then back them off.

And I always close a percentage of open position at set targets and let the rest run...it's the smart thing to do