Risk Reward Ratios or something idk I'll find a better title (jk, leaving this one)

Which risk reward ratio is best? Idk. That's not even what the video is about. Does anyone read these?

Risk disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

[ImanTrading]

I did not find a better title
edit 2 years later: I'm happy to report that Kevin (me, not actually named Kevin) actually recouped all previous trading losses and made a bit of profit this year, lol. 5 funded account payouts! Imantrading.org has a bunch of free info.

[Heat]

If you lose money on a trade you’re not wrong and if you make money on a trade you’re not right, just odds and probabilities - Mark Douglas

[JMRBR]

Sit in front of a screen every day for at least 5 years and you’ll find your edge.

[khalidal-hamadani]

For futures I started doing bracket orders with a set PT & SL. I never did that before because I was trading options. I started with 1:1 RR & had 72% winrate not bad! Now my profit factor is 2.1

[SvinthNathan]

In my ~1 year trading I used to think that risk to reward ratios didn’t matter. But now after changing to only taking trades with at least 2:1 risk to reward I’ve started to seem some progress in my trading. The reason is when you hit that inevitable losing streak you barely lose any money and it only takes a few winners to get back to green. Winning streaks pay out big and losing streaks barely hurt you.

[BDSMCRYPTOGOD]

God this channel is so refreshing, I’ve been thinking about this for years and watching so many gurus make claims about RR in trading while thinking “that’s not how probability works!!!”

The probability of a Conditional event is multiplied by the probability of each of its required preceding events. Price moving up 1 tick is 1/2, and price moving up another tick from there is 1/2. 1/2 x 1/2 =1/4.

So yes, the further your target is from entry than your stop, the more likely your stop will get hit. Period.

What’s funny is most people understand this concept and think this way when you zoom it out enough for them. Just ask, “if 2:1 is better than 1:1 and 3:1 is even better, why don’t you target 100:1?”

[jameschukwudum]

You're such a weirdo lol. Love it.

Ermm honestly this video confused me quite abit. Probably cuz the way I see trading is a little different.

You don't just chose to increase Risk:Reward ratio. The setup dictates your risk:reward. And as far as I understand an edge simply means a strategy that statistically would mean, based on your win rate and risk:reward, you will ultimately be profitable.

The higher your risk: reward, the lower your win rate needs to be to be profitable. However it is. You have an edge if over a relatively large sample size you are profitable, whether that be 60%+ win rate on a 1:1 or 20% win rate on a 1:6+. However I don't get how you could just increase your risk:reward on a whim, it's your strategy that will dictate your risk:reward. You can't just decide to go from a 1:1 to a 1:1.5, unless I'm missing something here

[tradelikezach]

If you have 0 edge(why are you trading) then yes RR doesnt matter.

If you have an edge, RR can make or break your trading.

If your edge says your trades frequnetly move 2R when you are right and you always take profit at 1R you can be unprofitable but if you wait for 2R you will bw profitable with very similar win rates.

[mamba_mentality]

What setups do you look for to take a trade? Supply and demand, pattern breakouts, high of day/low day breaks, trend trading, etc.

[ElkayLive]

Beginner trader: I have no idea if this will work out. Let me put a trade in!!

Intermediate trader: These breakout patterns are a great way to trade. I look for accumulation zones and buy accordingly. Sitting here at support we have a good trade set up based off this current falling wedge pattern. LeT mE pUt A tRaDe In?!!!????!!!

Pro Trader: I have no idea if this will work out. Let me put a trade in?

[easy]

So if I understand correctly, the point of this video is this: There is no point in switching between different risk to reward perimeters until you have an edge within the market. Aka a system. Once you have a system, you can backtest that system to find the optimal risk to reward perimeters for that system.

Can someone confirm this or am I just stupid?

[elendil]

Great point! high RR -> Low winrate -> STRATEGY EV NEVER CONVERGES -> variance, not your strategy, will decide your equity curve.

Low RR produces many trades and the high win rate makes the variance low. This enables both quick iteration of strategy and a statistically significant EV.

[lemurienconstricteur]

i feel like you're hyper focused on the statistics of this and crunching down numbers. pick a strategy and stick to it, SnD is really not 50/50 when done correctly

[ChrisTradez]

With this said, I believe it’s appropriate to take a wide risk, or larger risk 1:1 or 2:1 if the trade meets your edge of course, the only thing that may change your performance may be your emotions reacting to how your win rate may be or how much your account may be underwater, seeing how it may affect how you think during a trade maybe this is why it’s recommended to keep a good R:R

[Bubs]

"You cant teach someone how to trade, but you can teach someone how to learn to trade" -Bigfoot

[nikolajovanoski]

This is why i love you because you are good guy and you are only real person here

[whatislifebro]

Stop moving your SL and TP, the trade either works or it doesnt, each time you move either one, you minimise your win rate by 95%.

[sgl]

I think the 1 to 1 risk reward risk management is a great place to start. The base line is 50%. Its very easy to see if what you're doing is giving you an edge over random luck. I use it. If someone's win% is around 50%, , they're still going to lose money because of the spread and slippage. But if they are doing anything ( looking at support and resistance levels, supply and demand zones etc.) their win% should be closer to 60%. Also, they need to respect the range the stock is likely to move in a few candles of whatever time period they are trading. I only trade the ES so I know how far it can move at different times of the day. Of course, it can't always be exactly 1 to 1 risk/reward as the stop has to be placed in a logical place according to the previous price action. But if its way off, don't take the trade. I heard some great advice on a trader channel ( prop traders) I watch everyday. Start grading the setups. A+, B, C etc. before taking the trade. Start distinguishing your good setups and 50/50 setups.

[PropFirmPath]

It takes years and alot of pain and perseverance to see some success. Even then, you need to remain focused and disciplined to continue seeing success. You will still have terrible days but hopefully, at some point, the green days will overtake the red days. All the best :)

[techandmoney]

Guess what ... Kevin still sucks. Hahah, had me rolling!