🎯 How to Find a Reward-to-Risk Ratio That Works For You
“If your risk is too large, even a good win can’t save you. If your reward is too small, you’ll always feel behind.”
There was a time I thought trading success meant being right. But the truth? It's not about being right. It’s about how much you lose when you’re wrong… and how much you win when you’re right.
What finally made this clear to me was reading a simple yet powerful lesson on BabyPips — and it shifted the way I planned every trade.
📉 My Turning Point: Losing $100 to Learn a $10,000 Lesson
I once entered a trade on EUR/USD with a 20 pip stop-loss and just a 15 pip target. Why? I was chasing the setup, thinking I had a better win rate than I really did.
I got stopped out. Then again. And again. I was winning 60% of my trades but still losing money. That’s when I finally understood the message: I didn’t have a reward-to-risk problem…
...I had a self-awareness problem.
🔍 What Is Reward-to-Risk, Really?
The reward-to-risk ratio (R:R) compares how much you expect to make (reward) against how much you’re willing to lose (risk). It’s simple math — but it's powerful psychology.
- 🔹 R:R of 2:1 means risking $50 to make $100
- 🔹 A good trader knows their R:R before they enter a trade
- 🔹 Great traders don’t compromise it — even when tempted
📌 What I Learned (and You Should Too)
- ✅ Always define your R:R before clicking “Buy” or “Sell”
- ✅ Stick to setups that offer at least 2:1 — or skip them
- ✅ Track your trades and adjust based on real data
- ✅ Your win rate is meaningless without knowing your R:R
When I started applying this, something strange happened: I traded less… but I profited more.
📚 Resources That Helped Me
- 📖 How to Find a Reward-to-Risk Ratio That Works For You – BabyPips
- 🧠 Transmutation: The Inner Alchemy Every Trader Must Master – SeunForex
🔗 Follow for More Insights
📌 @SeunForex on X (formerly Twitter)
📺 @SeunForex on YouTube
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