moonchild
VIP Contributor
Understanding the concept of risk to reward might change your trading forever, if you understand it in depth you'll be able to profit more from the market, risk to reward is basically defines as your profit/risk per trade, if you risk one dollar how much are you getting in return.
In a trade you'll be risking a lot of money and this concept is trying to teach you how to risk just a little bit and gain a lot, say you enter a trade at a support and you risk 5% and you aim to make 10%, that's basically 1:2 risk to reward.
Most pro traders recommend using at least a 1:1 risk in a trade and scale your way up as you get more confidence in your system.
In a trade you'll be risking a lot of money and this concept is trying to teach you how to risk just a little bit and gain a lot, say you enter a trade at a support and you risk 5% and you aim to make 10%, that's basically 1:2 risk to reward.
Most pro traders recommend using at least a 1:1 risk in a trade and scale your way up as you get more confidence in your system.
