Risk reward is relative to ones strategy and if you play forex like one plays a game of cards you need a good risk reward ratio or you'll run out of money in the long run not being profitable on the majority of your trades. Someone who is a technical trader needs a good risk reward because technical trading is nothing more then playing the odds and trying to be at least 50% right all the time thus the need for a 2:1 risk reward ratio or better.
Personally I think technical trading alone is the road to disaster and one needs a keen sense of understanding of fundamentals to truly be successful in the forex market to bring those win loss numbers higher and have confidence in which way a currency pair is going. Once one develops a good idea of fundamentals and how the market will move then one can get away from the 20-50 pip stops that often get hit and trade with 100 pip or better stops knowing that eventually the market will turn in there favor.
Personally I think technical trading alone is the road to disaster and one needs a keen sense of understanding of fundamentals to truly be successful in the forex market to bring those win loss numbers higher and have confidence in which way a currency pair is going. Once one develops a good idea of fundamentals and how the market will move then one can get away from the 20-50 pip stops that often get hit and trade with 100 pip or better stops knowing that eventually the market will turn in there favor.
