WickCheck / Trading school / Risk to reward
Risk to rewardRRBeginner
How far the target is compared with the stop. A 1:2 trade risks 1 to make 2.
Simplified illustration, not real market data.
What it means
A higher RR needs a lower win rate to break even: 1:1 needs over 50%, 1:2 needs over 33%, 1:3 over 25%, before costs. But bigger targets are hit less often.
How to spot it
- Target distance divided by stop distance.
Common mistakes
- Planning 1:5 trades but taking profit at 1:1 out of fear. Your real RR is what you actually close at.
Related terms
R and R-multipleR is the amount you risk on a trade. A result of +2R means you made twice what y…Win rateThe share of trades that make money.…ExpectancyThe average result per trade, usually in R. Positive expectancy means the strate…
Why most strategies need a human behind the screen
Read the lessonWhat a mechanical test can and cannot tell you about smart money concepts.
Education only, not financial advice. Definitions vary between teachers; these are ours, written for clarity.