Risk-to-Reward Ratio: Why It Matters More Than Win Rate
Most beginners believe that a high win rate is the key to success.
But professional traders know: it’s not how often you win — it’s how much you win when you’re right, and how little you lose when you’re wrong.
That’s the power of the risk-to-reward ratio (R:R).
Here’s how smart traders use it:
1. They aim for at least 1:2 or 1:3 R:R – Risk $100 to make $200–$300.
2. They know even a 40% win rate can be profitable with strong R:R.
3. They never risk more than they expect to gain.
4. They cut losers quickly — and let winners run.
5. They understand that R:R builds long-term consistency.
Remember:
You don’t need to win every trade.
You just need to ensure that your winners are bigger than your losers.
That’s the secret behind profitable trading — not chasing a perfect win rate.
