Risk reward ratio is a common topic of the traders especially for all new traders. It is correct that when we trade we should be looking at a RRR of 1:2 or more. So that, when we make 5 losses out of 10, we are still in the black. However, this is largely abused by people trying to market their FX courses, where they try to paint the picture that trading is simple - "you don't have to win all the time", "our success rate is 70%", etc. These are bs when they don't teach their students the right stuffs.
My experience tells me RRR should not be the focal point, especially for full time traders.
For last week, I did an exercise with my group of traders. I asked them to take note of the frequency of their trading opportunities. My objective is to tell them that frequency of trading opportunities is a more important aspect to be addressed as well as the success rate. And I had 9 trades, out of which 1 fail, 6 wins, 2 breakevens (less than 10pips profit)
With these, then you can then devise your consistent approach towards trading (assuming you are trading based on your knowledge and skills).
Consistent profit is not based on "reliability" of the system or strategy, it is a result of the
consistent approach of your trading.
~ Eric Lye
(wrote this while I am at the cafe of Ibis hotel waiting for a client)
