[edacsac]

I've re-read the section in pip school and have been checking different threads and things about risk reward per trade. While I'm demoing, I've been setting my trades with a 25pip stop loss, and a 10pip take profit. I'm doing this to allow for movement. Now that I understand more, it seems I have a negative reward to risk ratio. Even being in the negative for reward/risk, it seem to make sense to me to have a somewhat generous stop loss to allow for drawdown that would increase for longer trades and be shorter for shorter time frames.

The reason I ask, I just received a call from a broker that I signed up for a demo with. He told me I'm doing the reward risk thing backwards. I disagree. If I've made a good choice on my trade, I shouldn't worry as much about a tight stop loss and should have room for draw down if I truly believe in my trade. If I use tight stops all the time, then a slight retracement or unexpected movement will knock me out at a loss before a profit could materialize. Shouldn't reward to risk be analyzed cumulatively at a later time as opposed to setting stops based on a ratio?

I guess this logic changes depending on the leverage you use as well. Having a higher stop loss then take profit at 10:1 is different then at 100:1. This particular broker offers 100:1 as the minimum. I don't know if I like 100:1, even though making a $1 on 10pips is certainly better than $.10. It just seems that larger leverages tend to influence tight stop losses as a trading plan because the loss is greater. On the other hand, I'm not doing so good in my first couple of days of demoing, as I'm hitting more stops than I am profiting. But thats just because I'm not making good trades yet.

Am I going in the right direction with my thoughts?