What is your risk reward ratio?

I totally agree with your statement. I am currently working on the new strategy more or less like yours. I look for the trend in long term and estimate the risk on smaller timeframe. I believe that market is unpredictable and no matter how good our strategy is, the most important thing is that we have statistical advantage over long term. Just my opinion.

'your question seem too simplistic'

I don't know what to say about that. The thread and the first post was made 5 years ago when I was still a learning trader.

But I will not even be concerned with the topic at all, as of currently.



It's not the R:R ration that is important.

If you ask me about that now. I would say it's something that comes naturally if one (tries to) get his entries and exits right (or at least decently so).



'How do you determine risk in your trades?'
'How to you determine reward in your trade?'

Significant, untested (fresh) levels



'What makes you think the risk is determined correctly?'
'What makes you think the reward is determined correctly?'
'How do you manage yourself while PA moves toward your risk and reward?'
'What PA movement falls within your expectations that the risk and reward remain valid target?'
'What PA movement would cause you to expand your reward targets?'
'What PA movement falls outside your expectations that will cause you to cut the trade short, whether you are plus or minus on the trade?'
'What PA movement would cause you to add to the position as it moves towards your target?'

Trading, for the most part, is very subjective.



'To say, "I only trade a 1:X R:R ratio", is kinda an empty statement.'

I totally do not think about R:R now.
If my entries are good, and trades well managed, getting good R:R is almost guaranteed.
If my entries are bad, and trades well managed, my loss will be kept reasonably small 'most' of the time. ('try to', because I manual exit bad positions). If losses are kept under control, R:R will likely to be at least decent/good.

This looks like an ancient thread that got resurrected. Nevertheless, I'll add my 2 cents. First of all, I don't have a fixed RR. I do have a minimum RR that I am willing to entertain and that is 3:1, but that doesn't mean I am going to settle for only 3:1 if I have reason to believe the price will go higher than that. I shoot for the maximum movement that I believe the price will reasonably go. I don't like cutting profit short. Like some other traders said earlier in the thread, RR is highly dependent on time frame as well. The lower the time frame, the more difficult it is to reach certain multiples. It's very realistic to hit 8:1 or higher for example on a daily time frame, but it's extremely rare on hourly and basically non-existent on smaller intra-day time frames. Also, as another trader mentioned, RR is highly dependent on win rate as well. So, if you are going to maximize your profits you have to look at your win rate in combination with your RR and then choose the best one based on your win rate. With that consideration, a higher R may not necessarily be better for your strategy and vice versa. Lastly, there are two R values. The initial one that you expect and then your returned R after the trade is complete. You may be aiming for 3:1, but if you trail you stop and typically get out at 2:1, then your true RR is 2:1 and not 3.

According to our trading understanding we generally select our risk ratio. As a newcomer it is more difficult to me to make sure a sustainable risk ratio due to lack of real market principle. But I always try to trade with 1-2% risk that is supportive to avoiding loss with certainly. I think it is more appropriate for the beginners trader.

For a beginner trader you just supposed is that how much you make in a wining teade. That is your suitble risk...

That's why it's also important to record all your trades and go back and analyze them

Yes newcomers shouldn’t focus on his winning trade percentage, he or she always have to emphasis to minimize risk and never trade with emotions.