Understanding Risk-Reward in Forex

Hey everyone, wanted to quickly touch on risk-reward, which is crucial for consistency. It's essentially comparing how much you're willing to risk on a trade versus how much you expect to gain. For example, if you enter a trade hoping to make 20 pips but are risking 10 pips, that's a 2:1 risk-reward ratio, which is generally a good starting point. This helps ensure that even if you don't win every trade, your profitable trades cover your losses and then some. It's all about playing the long game and protecting your capital, especially when dealing with pairs like $EURCHF where moves can be subtle but impactful.