A Simple Lesson in Risk Management
trading·@lewisglasgow·
0.000 HBDA Simple Lesson in Risk Management
<html> <p><img src="https://i.imgsafe.org/6496907837.jpg" width="960" height="640"/></p> <p><strong>Utilising a Risk to Reward Ratio in Forex</strong></p> <p>How many of you obsess over an 80% profitability rate? You may feel the need to be right all the time and cannot accept a large amount of losing trades. </p> <p><strong>OR</strong> </p> <p>You may think in order to become a profitable trader you need to win more than you lose. </p> <p><em>Well it's time to put that aside.</em> </p> <p>You do not need to have a high profit/loss ratio or profitability rate to become a profitable trader, you can be right just 50% of the time (as shown on the chart) and still make an excellent profit by utilising a strict risk to reward ratio when trading. You can actually have a profitability rate of 40% with a 1:2 risk to reward ratio and still be in profit! </p> <p><img src="https://i.imgsafe.org/64968a1564.png" width="1920" height="1033"/></p> <p>The higher your risk to reward ratio the less you need to be right, many professionals use a minimum of 1:3 meaning they will risk 100 pips to make 300 pips. </p> <p>I personally use a minimum risk to reward ratio of 1:2... But in order for you to do the same, it has to align with your trading strategy. Do not set unrealistic profit targets in which you will not achieve! </p> <p>To round off this post I truly hope this explained the positive effects of applying a strict risk to reward ratio in your own trading.</p> <p><a href="https://www.tradingview.com/chart/GBPUSD/ruwcLdVj-A-Simple-Lesson-in-Risk-Management/">Click here to view my original post on TradingView</a>.</p> <p><hr/></p> <p><em>Don't forget to upvote, resteem and </em><a href="https://steemit.com/@lewisglasgow"><em>follow me</em></a><em> for in-depth market analysis and investing education.</em></p> </html>