I have noticed I tend to do better with a 1:1 risk reward ratio.
Ever since my first day pretty much everything I have read forex related always says no less than a 1:2 RR
What’s your thoughts on it and does anyone trade this way?
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Why does it work best that way for you?
For me…I aim to use a Stop Loss that is smaller than my Gains…but most of my trades end up with larger stops that lead me to have this 1 to 1 ratio as well…so my profitability tends to be dependent on my ability to be right most of the time.
For exsmple…one of my strategies aims to use 40 Pips to target up to 70 Pips…
…but most of these trades tend to require a Larger Stop Loss…so 40 Pips ends up being the ideal rather than the reality…
For example…in this latest trade that got 65 Pips…
I actually needed to use a Stop of 98 Pips in order to make sure the Stop was at the Strongest Area and far enough so the trade was unaffected by temporary reversals.
So to ensure profitability…a little more risk is often necessary…even if it means a negative RR.
Duane
DRFXTRADING
I think a pre-determined r:r is a dangerous rule to follow. If you are entering and setting your SL and TP using TA, the r:r can only be reckoned from that specific trade set-up. You can’t decide it in advance even for a similar trade strategy on the same forex pair because volatility is never constant.
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It 1:1 Risk Reward workes well for you, it is the best for you. What works for other may not work for you. It is all about what works for you. You should know your strength and weakness. If your system doesn’t give you signal of a trade 1:2 RR, why you would think for that. Be happy for what doing… Hope it helps you. Cheers
I think, if you trading system provides more than 58% success ratio, only then go for 1:1. Otherwise, no way.
I find I am more successful using a 1:1 RR as I am able to catch small movements, Like Price will move about 13 pips I have a 10 pips S/L and 10 pip TP. In some cases prices continues to move in the direction I was trading others it turns or ranges.
I tested it out a few weeks back on demo. My starting balance was £5k and by the end of the week I had just under £8k. I was over trading though and wouldn’t be able to recreate that live trading.
Since then I have been trying for a 1:2 RR and in many cases I see it move a few pips then reverse or and as I just discovered the other day because I have a less aggressive s/l price has to move further I lose my bottle and close the trade.
I would like to know what your leverage was , if using a 1:1 RR then I would trade not more than 2% of account. Also try moving your SL to break even somewhere down the line. 
The main problems with 1:1 on tiny pip moves (10 pips) are these
- Spreads will discount around 6-12% of your total win money
- price will need to move around 11 pips in your favour to cash a 10 pip win - but will lose 10 pips on a movement against you of around 9 pips ! (Bid / Ask bias - aka “the grasping hand v the sulky child” )
- So you need a BIG win /lose ratio to just stand still financially - Keep fastidious records in excel and do your arithmetic regularly - before you decide to go to longer time frames where these disadventages are reduced somewhat. (as I did)
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Try and get away from using a fixed ratio for R:R. Using a fixed ratio sets you up for a loss, or you will end up leaving a lot of pips on the table. Either way, you compromise your trading.
What signals you to enter the market? Look to see if you get an opposing signal and you can exit there.
If you can elaborate on how you trade (indicators, entry criteria, etc) then perhaps we can help you through this.
I watched a live NFP trading session last night with Kathy Lien. Her and her trading partner both trade 2x risk to 1 time reward. Both are very accurate and generates their income being professional traders. So each to their own. So long as your results are good no need to fix something that isn’t broken.