Just read over risk reward ratio in the School of Pipsology. If i am interpreting it correctly, you create this by creating a ratio b/t expected profit and expected loss. It looks like you use your stop loss as your expected loss, but what number do you use for expected profit. If you can’t accurately predict the magnitude of a move how can you predict what your expected profit would be??? Thanks for the help !!
Well before you enter any position most people have an expectation of where the price might end up, otherwise why would you open a position? If we expect the price to rise is is rather illogical to enter a trade where the price may only rise a little but risk a huge sum. There are various ways of picking profit targets, many people pick profit levels at previous S/R levels. But this of course depends on your trading style.
You will understand that part in time. You should never enter the market unless to have an projected profit taget. Knowing entry and exits is important. And if you just base a stop loss on lets say 30 pips because that sounds like a good number in my opinion thats not a good way to trade. I set my stop loss based on market analysis and my profit target is base on the same analysis. Not sure if you get what I am saying but in time you will see where your entry is where your stop should be and where your exit should be base on your strategy. If your profit target is three time as far from your entry than you stop then R/R is 3:1. Then I calculate my position size based on my stop loss. Sure someone else here can explain better than me
Thanks for the help.
yes, this is still part of my trading learning curve that I will have to learn.
Once you have decided on a strategy then you can make rules for that strategy. One of these rules will be how many pips away from entry will your target and stop loss will be. Once you have established these rules then you should follow them to the letter to prevent any emotional involvement.
Not necessarily with alot of strategies worth sticking with long term the market will decide where your stop and take profit will be based on your rules and your stop will determine your position size. Just something to ponder on not saying your wrong all depends on your strat. But from what I have seen if you limit yourself due to your rules you can miss out on alot of pips let the market tell you the trade and then you decide if it is worth taking that trade.
I certainly agree with you bob that taking this stance forever can cause one to miss quite a few pips. I just felt that as a beginner its important to get the fundamentals down and be able to maintain self control so that even more money is not lost.
fine !I find many similar articles! Today you see this message! Learning! 
Dont get confused. The R/R ratio is only for the winning trades. Lets say you had 10 winnigs trades last week and 10 losing trades. Your win loss ratio is of course 50%,
Now, lets assume that you had a 20 pip Sl for all the trades, and you won 50 pips each trade, so to calculate your R/R:
(5010)/(2010) = 500/200 = 2.5
Your system the last week gave you a 50% w/l ratio with a 2.5 risk/reward
Huh? I don’t guess I follow you…
Hey gasanvill I was referring to the post above yours. Just didn’t want you to have to explain twice.
what part you dont understand?
No, what I meant is I understand what you said. Rather I was confused by the post from usfine.
gasanvill that was very well put