Quote:
Originally Posted by decoir
Surely this isn't right. If you, for example set a stop loss of 20 pips and took profit at 40 pips, then sure, you'd gain twice as much in a win as you'd lose when you lost, but because the stop-loss is twice as close to your starting position than is the take-profit marker, wouldn't it mean you're twice as likely to lose than win, meaning you're back to 50/50?
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With a 2:1 reward/risk ratio you can only be at break even losing twice as much trades as you have won.
2 wins - 2x40 = 80 pips
4 loss - 4x20 = 80 pips.