Understanding Risk-Reward: Why $CADCHF at 0.58406 isn't just a number

Too many folks focus solely on the 'reward' part of the equation, chasing every whisper of a monster move. But honestly, if you don't define your 'risk' first – that is, how much you're willing to lose if the trade goes south – you're just gambling. For instance, if you're looking at $CADCHF currently at 0.58406, and you're aiming for, say, a 50-pip gain, but your stop-loss is 100 pips away, you've got a terrible 1:0.5 risk-reward ratio. That's a losing game over the long run, no matter how many times you tell yourself 'this time it's different'. Good risk-reward is about stacking the odds in your favour, even if your win rate isn't 100% – because it never is.