Risk management · Lesson 13

Risk to reward ratio

Risk : reward

You can win only four trades out of ten and still make money. Here is how.

1 : 2 risk reward

Risk$10 per trade
Reward$20 per trade
4 wins, 6 losses+$80 - $60 = +$20

If you risk ten dollars to make twenty, four wins and six losses still leave you twenty dollars up.

Risk : reward on gold

Example: a stop 1.5x the ATR away from the entry (beyond normal noise) and a target twice that distance - a 1:2 risk to reward.

See today's live gold chart, trend and key levels →

Quick quiz: Risk 50 pips, target 150 pips. Ratio?

  • A: 1:2
  • B: 1:3

Answer under the YouTube lesson - we read every comment.

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Trading involves risk. Lessons are for education, not financial advice.

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