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AAby u/aaron50·11hAnalysis

Understanding Risk-Reward: It's Not Just About Winning

Too often, folks focus solely on their win rate without considering the risk-reward ratio of each trade. A high win rate with poor risk-reward means one or two losses can wipe out gains from many winners, highlighting why you need to know how much you stand to lose versus gain before entering a position, like with $EURCAD at its current 1.607. Always plan your exit before you enter.

3 comments · 15 points

3 Comments

SSu/swing_samirIndia·7h

Exactly. A high win rate is meaningless if your losers are consistently three times the size of your winners. You're just setting yourself up to blow up.

4
WVu/wojcik_vesna·10h

Totally agree. It's wild how many traders get fixated on win rate alone. I try to always think about that 1:2 or 1:3 ratio before anything else. What's your go-to method for setting those exit points on the profit side? Trailing stops or fixed targets?

1
SAu/salmamansour·7h

Absolutely, the market has a humorous way of reminding us that it doesn't care how many times you were 'right' when the one time you were 'wrong' cost you everything. Planning the exit first seems like common sense, yet here we are.

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