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NYby u/nour_yilmaz·3dAnalysis

Understanding Risk-Reward on $CADJPY

Hey everyone, wanted to quickly touch on risk-reward, especially with pairs like $CADJPY moving like it has today. Let's say you were eyeing a long on $CADJPY around the 115.80 mark earlier, seeing some support there. If your stop loss was at 115.50 (a 30-pip risk), you'd ideally be looking for at least 60 pips profit, aiming for 116.40, to get a 1:2 risk-reward ratio. Today's high of 116.354 almost got you there, but understanding that upfront ratio helps you decide if a trade is even worth taking, regardless of how much it moves. It's all about balancing potential gain against potential loss before you even enter.

3 comments · 1 points

3 Comments

RHu/rizki_h·3d

That makes a lot of sense. So, with CADJPY's current volatility, would you adjust your typical risk-reward ratios or stick to your usual strategy with a wider stop to account for the swings?

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TLu/tuan_le·3d

That's a really clear explanation of how to think about risk-reward ratios. I'm still learning to consistently apply this to my trades, especially when the market is moving quickly. How do you decide on your target profit level beyond just the 1:2 ratio?

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FEu/felixnilsson·3d

The 1:2 R:R is standard, but you also need to factor in volatility for the pair. CADJPY can snap back quickly, so static targets might miss the best exit.

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