Understanding risk and reward ratio for beginners

Hi there,

Greetings from new member. This is my first thread in this forum and I hope this content of mine is helpful to other fellowship members who's still beginners and keep looking for ways out of their problems in trading.

It's called risk and reward ratio. How does it important for us? Of course it is, because we'll know how much risk we want to take per trade and how much of money we can afford to lose, since we can't expect to get profits all the time from market, yes? Knowing that we're competing ourself to other traders in market, we must be careful before taking any decisions to market because everything will determine our result.

I got few recommendations about risk and reward ratio and which amounts are best for beginners to help them learn trading and able to feel the experience of profit taking and losing accepting in this business. There are the ratios: 1:2, 1:4, and 1:10. Where the first number indicates how much we want to risk our money and the second number indicates how much rewards we're looking for.

Simple math needs to be explained. In first case with 1:2 risk reward ratio and we got $100 deposit, where we can risk our money $10 and then our expected profits should be $20. Our stop loss will be $10 and $20 is our next take profit. And so with any examples you can make on your own as long as it follows the listed risk to reward ratio that I've suggested before. The bigger the reward, the longer we must hold the trade without increasing the risk and keep it fixed.

Linkback: https://www.forex.zone/forex-education/29/understanding-risk-and-reward-ratio-for-beginners/924/

Win ratio 7: 3 is good in trading

Use risk percent against capital or pips in each of our orders

Hi there,

Greetings from new member. This is my first thread in this forum and I hope this content of mine is helpful to other fellowship members who's still beginners and keep looking for ways out of their problems in trading.

It's called risk and reward ratio. How does it important for us? Of course it is, because we'll know how much risk we want to take per trade and how much of money we can afford to lose, since we can't expect to get profits all the time from market, yes? Knowing that we're competing ourself to other traders in market, we must be careful before taking any decisions to market because everything will determine our result.

I got few recommendations about risk and reward ratio and which amounts are best for beginners to help them learn trading and able to feel the experience of profit taking and losing accepting in this business. There are the ratios: 1:2, 1:4, and 1:10. Where the first number indicates how much we want to risk our money and the second number indicates how much rewards we're looking for.

Simple math needs to be explained. In first case with 1:2 risk reward ratio and we got $100 deposit, where we can risk our money $10 and then our expected profits should be $20. Our stop loss will be $10 and $20 is our next take profit. And so with any examples you can make on your own as long as it follows the listed risk to reward ratio that I've suggested before. The bigger the reward, the longer we must hold the trade without increasing the risk and keep it fixed.

the winning rate actually plays a bigger role, although the risk reward ratio must not be ignored. The bigger the winning rate, the more secure the condition, even though in some trading systems it applies risk> reward. Moreover, if the risk <reward with a high winning rate will also produce more profits. That means the key must be to find / use a trading system that is truly consistent with a relatively small winning rate deviation. 

Hi there,

Greetings from new member. This is my first thread in this forum and I hope this content of mine is helpful to other fellowship members who's still beginners and keep looking for ways out of their problems in trading.

It's called risk and reward ratio. How does it important for us? Of course it is, because we'll know how much risk we want to take per trade and how much of money we can afford to lose, since we can't expect to get profits all the time from market, yes? Knowing that we're competing ourself to other traders in market, we must be careful before taking any decisions to market because everything will determine our result.

I got few recommendations about risk and reward ratio and which amounts are best for beginners to help them learn trading and able to feel the experience of profit taking and losing accepting in this business. There are the ratios: 1:2, 1:4, and 1:10. Where the first number indicates how much we want to risk our money and the second number indicates how much rewards we're looking for.

Simple math needs to be explained. In first case with 1:2 risk reward ratio and we got $100 deposit, where we can risk our money $10 and then our expected profits should be $20. Our stop loss will be $10 and $20 is our next take profit. And so with any examples you can make on your own as long as it follows the listed risk to reward ratio that I've suggested before. The bigger the reward, the longer we must hold the trade without increasing the risk and keep it fixed.

Right bro, I also often use risk and reward 1: 2, although sometimes I also use Risk and reawrd 1: 1 if the take profit area is not large according to my analysis.

the risk reward ratio is indeed a pretty good MM and if implemented properly it will have the opportunity to increase profit potential.

RRR is one of the important money management especially for beginners, so traders must understand and apply it well.

Hi there,

Greetings from new member. This is my first thread in this forum and I hope this content of mine is helpful to other fellowship members who's still beginners and keep looking for ways out of their problems in trading.

It's called risk and reward ratio. How does it important for us? Of course it is, because we'll know how much risk we want to take per trade and how much of money we can afford to lose, since we can't expect to get profits all the time from market, yes? Knowing that we're competing ourself to other traders in market, we must be careful before taking any decisions to market because everything will determine our result.

I got few recommendations about risk and reward ratio and which amounts are best for beginners to help them learn trading and able to feel the experience of profit taking and losing accepting in this business. There are the ratios: 1:2, 1:4, and 1:10. Where the first number indicates how much we want to risk our money and the second number indicates how much rewards we're looking for.

Simple math needs to be explained. In first case with 1:2 risk reward ratio and we got $100 deposit, where we can risk our money $10 and then our expected profits should be $20. Our stop loss will be $10 and $20 is our next take profit. And so with any examples you can make on your own as long as it follows the listed risk to reward ratio that I've suggested before. The bigger the reward, the longer we must hold the trade without increasing the risk and keep it fixed.

nice explanation about basic Risk and Reward because in the transaction there must be profit and loss so it must be calculated well. for RR 1:10 is it not too big?

Hi there,

Greetings from new member. This is my first thread in this forum and I hope this content of mine is helpful to other fellowship members who's still beginners and keep looking for ways out of their problems in trading.

It's called risk and reward ratio. How does it important for us? Of course it is, because we'll know how much risk we want to take per trade and how much of money we can afford to lose, since we can't expect to get profits all the time from market, yes? Knowing that we're competing ourself to other traders in market, we must be careful before taking any decisions to market because everything will determine our result.

I got few recommendations about risk and reward ratio and which amounts are best for beginners to help them learn trading and able to feel the experience of profit taking and losing accepting in this business. There are the ratios: 1:2, 1:4, and 1:10. Where the first number indicates how much we want to risk our money and the second number indicates how much rewards we're looking for.

Simple math needs to be explained. In first case with 1:2 risk reward ratio and we got $100 deposit, where we can risk our money $10 and then our expected profits should be $20. Our stop loss will be $10 and $20 is our next take profit. And so with any examples you can make on your own as long as it follows the listed risk to reward ratio that I've suggested before. The bigger the reward, the longer we must hold the trade without increasing the risk and keep it fixed.

the calculation of the level of risk rewards is very important for beginners, thanks for the info sir.