The Ugly Truth About Risk To Reward Ratio (95% Of Traders Get It Wrong)

[@stefstaf]

You're the man Rayner !! At last someone addressing this issue. I had to find out the hard way, so many winning trades turn losers just waiting to reach this 2 to 1 W/L ratio. As soon as I stopped this nonsense, I started seeing profits in my account. Pocket any 1 to 1 winner and live to trade another day. Great video.

[@yaheroyamero7066]

What is the best RR? I don’t understand it so much, because my English is not so good. What is the best strategy 1:2? Or 1:1

[@moe490]

Why is a high RR at a high win-rate nonsensical, simply because you lack the ability to archive it? It’s definitely not nonsense, nor impossible. My current winrate at an average RR of 1:7 is 58ish %. Not far off to from achieving 1:10 with a slighty lower winrate, not only 5%. What Rayner is talking about is just hypothetical examples, based on his own inability.

[@XerpollAnimation]

@@moe490 yeah sure bro, its easy to say in comments on how great of a trader you are. Rayner's audience were newbie trader and he's a teacher. Bro if you start a youtube channel and teach with that 1:10 rrr, most of your followers will never win

[@gslvqz8812]

This is exactly what I was thinking... the risk to reward ratio does not make much sense, and it is even worse when the money to invest is not very much....let's say you are looking for a trade with a 1 to 3 ratio, where for every dollar, you will make 3 dollars (you are talking that you will need to find a trade that will give you 300% of what you put in)... is not very likely.

[@nobody796s]

it would be really nice if you could do a live trade so we can learn directly and implement when to use this and that.

[@tradernaveed]

Weiss man agree with u

[@fascinatingniceview5844]

Yeaahhh..

[@leatherhouselegacy7032]

Yup

[@PSMenno]

Agreed! Even if its a demo

[@tradingwithrayner]

The closest you can get kzbin.info/www/bejne/d5Oko5aJgahjZ5Y

[@stryker4763]

1:1 is going to be king then😅 Because it gives me aproxx 76% of winning rate according to the market structure

[@DubaiiMakavelii]

I just focus on 1:2, 1:3 max now. I learned my lesson. In & out ‼️

[@thesuccessfultrader257]

Learning mine now after getting 2 R several times and not taking it but kept waiting for 4-5R

[@davidhoward5687]

I trade what I see, if my next zone is less than a 1:1 RR I still target it, if my next zone is 3:1 away I take it because more often than not those zones are going to hit.

[@res0x93d]

Nice advice

[@MasterWr3n]

1:2 or 1:3 is key. Negative RR is for wealthy ppl trading 50 lots per trade.

[@KINGRIDEZ44]

I’m new in trading stocks just 2 days and I’m glad I have landed on this content thanks a lot Meanwhile I made my very first $2 profit 😀😀

[@Jesse_Scoccimarra]

this video made me realize that this is somewhat similar to the lottery, there is the possibility of turning one dollar into a trillion but you have a 0.000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001% chance of that happening, and we might as well save our money.

[@dadasahebkadam8390]

Right. What a calculation bro! 🤣🤣😂How many zeros are there?

[@misspriyankayadav]

I want 1 in starting and the money in my bank account

[@eliasbill4981]

your perception of trading and lottery are similar but in actuality the only similarity between trading and lottery is uncertainty

[@lionking20101000]

thank you so much i have more than 16 years in forex and completely agree with you.

[@sleepystalks107]

damn

[@MandhanAcademy]

correct bro!!!

[@satyabratsamal7195]

It is a pleasure listening to you 👍👍👍

[@0830007]

Make sense! There's a lot of potential trades that I end up not taking. The candle stick patterns is right. The trend is right. The price respect the MA and bounce like a rabbit on a riddim. But... the target price has too much obstacles! Either it has a strong resistance levels nearby or it only go up for so much at each bounces. Thanks! From Quebec, Canada!

[@jaysoegaard]

I wait for bullish market sentiments and specific news.....Mergers, aquisitions , fda , fast track, and make sure variables are in place ...Low short intrest , undervied, avg volume vs volume inflow and then take a that trade. Market sentiment direction alomg with specific news works best for me. I wait for the right plays to show up and bet big ....every other day is a raiy day and I dont trade.

[@sammyt6364]

Hey hey ... great vid Rayner my friend. Love what you put out and explain. :)

[@musicroad3501]

wrong maths. Every time you win or loose its % of your capital. So if you loose 95 times in a row (1%+95*0,01%) the time that you win, your capital it will be x% less. so the profit will be 10% of your almost half capital.

[@thumperbumper8428]

Risk to reward....you actually have to win the right percentage of trades. Most just lose all trades and go broke.

[@the.rumers]

Thanks for sharing Ryan 👍🏼 couldn’t agree more than this

[@emmanuelkongnyuy773]

Your right my brother i have loss alot just because i try to maintain 1:2

[@Greatvideo2024]

Hi rayner i wandered here coz i thought your videos are for btc traders. But I do have a lot of learning in trading forex and stock market now. Thanks to you :) Hey can I use these techniques in trading btc?

[@JamesofQPR]

Nice one..thanks!

[@jaylhw1]

Aiming for high RR does not mean, we need to trade off the win rate, if we really know what we are doing, what to expect, when to set to break even price. Low RR does not guarantee high winrate either.

[@fixmaster6956]

Well this is actually a thing in my mind, someone just said u should have 1 to 2 risk reward ration, but what they dont know, to go to pass that 1:1 is another risk it self, as it can go to yours 1:1 and pull back to the price you entry and suddently go to your stoploss

[@KingJT80]

it depends on the setup they're using. if your setup has a really high win rate yes 1:1 or less than 1:1 can work. if not you need a high reward compared to what you're risking

[@eliasbill4981]

that is a normal uncertainty common to trading even in a 1:1 rr it could still move 0.5 and come back and hit your stoploss, you are risking 1% either ways the question is would you rather hit a 1:3 1:5 for that same risk or settle for a 1:1 note provided you have the skills {system,straregy} to realise this .

[@Woodward06]

Upon trade entry, if your R:R is 1:2 (25% win rate), the counterparty has a 1:0.5 R:R (75% win rate). They take those profits to promote R-multiples as a must via Websites/Online courses. That way your broker/market maker always has a win rate above 50%. If Oanda is giving you trading advice, its in their favor.. look at who sponsors Babypips, ForexFactory.

[@Woodward06]

@@KingJT80 Volatility and spread aside, a 1:1 RR will yield 50% win rate. Anything above 50% quantifies as an edge. Anything below is a negatively skewed strategy. As long as the win & loss distribution is even, positioning will control profits. ie; if I win 33% of the time, but its L-L-W-L-L-W consistently, just increase position size until the W in achieved.

[@thisGuy481]

One thing that gets swept under the rug is that if you do margin trading with a very small account, and you may hit 2-3% gains quite easily, is that the fees can eat up your gains.

[@geo.4208]

taker and maker fees aprox. 0,075%.. so with 2% u are nicely in profit...

[@nurlanamirgaliyev7601]

That's the answer I needed! Thanks for vid!

[@martinaasen8440]

Dude, i always, always, ALWAYS make sure my target is 6R and my win rate ranges from 44 to 60% each month

[@eliasbill4981]

that sounds amazing i guess u trade smc yeah ?

[@martinaasen8440]

I dont know smc. Using simple trend lines, dont matter which ones just as long as they follow the trend nicely, at the moment i have 15-20-25 SMA. As long as they dont cross and all 3 moves nicely in the same direction im good. But most important is how price moves, when price moves very clearly in a down trend: previous highs should always be - green green green green then first red should be the top. Not green red green red. Short at first red, SL above highest point of last 2 candles, TP last low. Its so simple, just have to wait for market to move nicely.

[@twovthree]

@@martinaasen8440 Cool! Sounds like you're describing orderflow/re-alignment. Imma test this!

[@josephmwanzia6995]

You inspire me daily..I'll become a great trader soon✌. Keep doing the good work.

[@jasonwealth3613]

Hey Rayner. Could you do a video explaining what happens when the fed rate remains unchanged

[@asad10a]

if you only look at the trade spreads it's most of the times even difficult to jump the spread between buy and sell And i thought 3:1 means, risk 3 to get 1 reward and i was wrong to understand i learned now i was correct through this video.

[@Muneebbaqir-512]

Hello sir, if our winning ratio is much good means 70 to 80 percent then can we use negative rr means 2 to 1 or 3 to 1 risk to reward and if yes then what money management should I follow in that specific case

[@KostasYoutube]

Excellent video, one of the few that tell things the way they are! Risk/Reward Ratio is used wrong by many traders. Everybody wants to risk low and win high, neglecting the other statistic tools. Thanks Teo for this video!

[@mansoormasoudifard8624]

Very good tips 👍🏻👌🏻

[@medielijah]

You are the real thing. Big Kudos

[@bill.Latham]

I would some what have to agree risk, reward is based upon one trading style, and stragety. A trader may have a stragety that will give them 1.5R 64% of there trades, but with so much emphases on 3:1, or better that same trader will lose in the long run, and wonder why. I feel strongly that risk, reward is based on stragety, and trading style, and most traders don't know that and wonder why the they barely scratching the profit surface.

[@ricardoneves5094]

In theory you are correct, that the Risk/Reward ratio in itself is meaningless, however this video is also a bit (maybe more than a bit) misleading. So what is a winning rate? Nothing but the ratio of the times one gets profits over losses. In other words, the rate you exited a position at the reward level instead of the stop loss level. So the winning rate is in itself an implied R/R. Hence, a strategy + r/r = win rate, You gotta optimize you ratio to your strategy. That’s why many folks here say that “the x:y ratio works best for me”. Another option is to optimize you strategy if you rather stick with a given ratio. Use a simulator to test which ratio maximizes you profits for a given strategy, or vice versa. Nothing in the markets is simple. Or it is complicated. Hope this helps y’all’s.

[@Woodward06]

The math works for all entries at all times in an efficient market. If SL is away from daily volatility and spread is 1% or less of SL.

[@lvl-savage-lvl6659]

Hello I ordered the book but never receive my digital copy ? Please help me

[@tradingwithrayner]

Hey Savage, please reach out to [e-mail] and we'll assist you.

[@lvl-savage-lvl6659]

@@tradingwithrayner Thank you I received it I sent them an email. I’m already on page 50 right now can’t wait for my real copy

[@lakshmishalaksh7129]

Let's talk transaction cost as well- you win a dollar, you pay transaction cost of 10c (total win-90c) you lose a dollar, you pay transaction cost of 10c, (total loss- 110c)

[@fridayeche986]

Good day Sir, I really need the book on Candle stick chart and Price action. Thanks

[@TennexTrader]

Rayner do you think it's possible to have a fix Risk to reward

[@Nevan1710]

Now it's clear, thanks a lot Rayner! 🙏

[@forexvillapro]

I love this guy, great content Ryner!

[@BlessGodMinistry]

Appreciate the help bro God bless you

[@BlessGodMinistry]

@@jasonpizzino6356 These bots be going crazy these days lmao have a nice day imposter God bless you too

[@cristianmicu]

precision and money/ trade management are key and very few traders can over come the complexities and intricacies of these two combined

[@cristianmicu]

@Rayner Teo AH? SORRY, THATS A REPLY TO MY COMMENT, RAYNER? A SUGGESTION FOR A SIGNASL SERVICE? STRANGE COMING FROM THIS CHANNEL

[@mpho438]

I was ready to type and disagree with you, until I listened all the way through.... You adjust your risk to reward to to be suitable to your win rate. Your win rate is a clear snapshot of your trading journey, it tells your abilities and your shortcomings, and honestly mathematically the numbers don't lie,if you only do 30% - 40%, that's the numbers telling you to stick to a R:R suitable enough to accomodate you win rate, I realized this taking a bath the other day.

[@rikodewaner]

Counting the RRR is not the point. You should know how to set certain trade with certain RRR. A good trading will give you high net profit per Risk ratio. Net profit(gross profit - gross loss) per risk means, net profit per average loss(gross loss per loss trade). Use whichever trading method that gives you high rate of that ratio

[@MukeshVerma-kw4os]

How do break even trades fit in to the equation?

[@jennifergonzalez6431]

We appreciate you so much!!!

[@xxxxxxxxxx3390]

True... IF the 1:10r success rate was actually only 5%- that's just math. How was this supposed 5% win rate calculated? Just curious. Thanks!

[@eliasbill4981]

basically if he took 100 trades he would win only 5 time, same applies to 10 trades would win 0.5 times

[@Woodward06]

If 1:1 is 50%, then a 1:10 is 10 times harder to achieve. Take the 50%, divide by 10 and you'll get the 5% win rate. Brokers love to promote traders that hit a 1:10 R:R ratio. It's profit to them 95% of the time.

[@HereWasDede]

you make videos i like. conditional probabilities

[@zaingazi3548]

... always liked a whistleblower. thanks my man... you're still good value.

[@chinwebekee3447]

Rayner you're amazing. Blessings!!!

[@PeNkZ69]

You did it again Rayner! you exposed the truth! I believe in you.

[@Jeeva-Tiwari]

Great presentation...Thank you

[@PaulShare1]

Asess if can do 1:2 for that trade, or just take what you can. A profit is a profit.

[@abhishekpatil6408]

I always thought about it and you cleared it out finally. Thank you Rayner.

[@RedeemResh]

Thank you so much Rayner

[@syedrasheedhassan]

Love from India!!!

[@brandonlee5029]

Should I also include the spreads, Commissions, and swap costs in my risks before setting a reward goal?

[@tradingwithrayner]

I usually don't. But if those are a significant amount for you, then you should.

[@lambilamulikita3734]

Amazing stuff bro

[@izzyrov5814]

Good analysis, as always!

[@jasonstubbs9580]

If u are 50/50 on a 1:1 u will still be in losses, because of commission and swaps....If u are a serious trader 1:2 is a minimum 1:3 is the best

[@Woodward06]

The 'best' R:R is the most consistent at 1:1. 1:2 is 25% win rate, 1:3 is 17% win rates. A 1:0.9 will win 52.5% of the time. Position sizing and distribution of Wins & Losses is where you make the money.

[@chinemelusimon8688]

How can we know our wining rate

[@littleDoughie]

Literally a week after I started watching Rayner's video's my trading performance improved dramatically. Thanks again for all the amazing content you put out there. Much love from Canada

[@yaheroyamero7066]

Which is the best RR ? 1:1? ?

[@piercarloscalamandre5204]

I trade Risk 1 reward 0.25 and I like it very much!!

[@thomasdacquinonguiongui5911]

I am not totally agree with that winning rate statement from the great trader Mr Rayner who i respect at lot . I think the most important thing is how much are you making at the end compared to how much are you loosing. You can have a winning rate of 70% but at the end the total money you lost is more than what you won , but with a rr of 1:3 or more it's possible to have a low winning rate and still be profitable at the end of the month.

[@LucretiusEldritch]

It's all about the profit factor.

[@kasulebaker8044]

RR is mostly used to know how much your willing to risk without RR how r you know the amount Ur Risking

[@pnwguy5551]

You my friend have this trading knowledge down

[@SK-le1gm]

Buy red stocks or green stocks?

[@dadasahebkadam8390]

I liked this video.makes sense Who discovered Risk to reward ratio as 1:2, 1:3 ? It's like Duckworth Luis Rule in Cricket cricket match. No one understand.

[@Nietzschian_Nihilist]

The ugly truth about risk to reward ratio is... it's actually "Reward to Risk" ratio 😜

[@niladrhbiswasinstitute636]

Right

[@Honeyravall]

hahaha

[@Saurabh2y]

That’s hard to speak

[@dadasahebkadam8390]

Right bro 😂🤣

[@ashlynnseverythingfun6004]

Good morning Rayner

[@emperorgoldman3278]

Great videos, your vision is well explained 👏 thanks

[@balentincamargo5248]

U a great dude, god bless 🙏

[@infopadpk7599]

on a lighter note imagine Rayner changing his T shirt for the videos only... 😁❤️

[@customkittyliners]

Good Information - Thanks

[@ArunKumar-pw1xu]

Thankyou rayner for sharing with this .

[@BalanJ1007]

Thanks Rayner... myth of RR is the king of everything is busted..

[@memist5685]

great video bro keep it up

[@amcshortsqueezetechnicalan4036]

Great video 💙

[@walduss7939]

Mi ratio....8 loss 1 win, 1 in break even! Can be worst? Jaja. Waiting to improve my knowledge in trading,,,!

[@kittyyykat77]

does your money will get liquidated if you didn't met the risk reward ratio? or it's still meaningless???

[@JLaDrew]

brilliant mate!

[@karldobbs1938]

How would you combine your risk to reward market stats with your winrate market stats to produce a overall risk score? I'm trying to find a way of producing a risk score for a market based on those two factors. What I want to do is produce risk categories for the markets. Low, Medium and High risk. Is their a formula to produce an overall risk score by combining risk/reward with winrate?

[@eliasbill4981]

look up profit factor hope it helps answer your question

[@vikramsharma1360]

How are you doing

[@shaynepursley9467]

hey great video, I'm new to trading just been prating on paper trading for awhile but I'm a little bit confused on how do you find those 2:1 risk ratio stocks, I just figured it was always a 1:1 ratio

[@knarfregnirts3905]

Hello, I’m going on a long deployment soon and my stock portfolio is 65% divided stocks and the rest are a mix of penny stocks and reliable brand name stocks. I was curious if I could get some advice of how I could set up my portfolio for when I’m not able to look at it for months in end

[@Mis_guidedz]

$cciv

[@LALAKERSHOW]

What if u only risk 1 cent basically the sec ur down ur out

[@ShivamSingh-mg9nu]

Exceptionally correct!

[@wencawili5104]

I will never get tired of hearing these intros.

[@revolutiontimez]

Welcome back my friend, your price action book was a blessing 🙏🏽

[@JOYTECHSoumitrapathakkingboss]

1:1.5 Happy

[@mayurshewale5000]

Truth behind risk reward ratio...☝️👍👍

[@tothemax225]

I'm new with this, and I'm trying to understand something. A risk-reward ratio of 1-2 would mean you trybto make 2 dollar with an investment of 1 dollar (or 20 with 10 etcetera). But that would mean a profit of 100%. Thats not realistic. What am i understading wrong.

[@aodhanloki]

I'm new to trading, but I think I've got this one right. I've found that the way people refer to it is misleading. Your "risk to reward" ratio is used, but really they should say "reward to risk" ratio. 2:1 ("two to one") means the point that you want to sell for profit is twice the percentage away as the point that you'll sell to stop your losses if it goes against the direction you expected it to. The general idea here seeming to be that if, when you win, it's 2x as much as when you lose, then you'd only have to be right 1/3 of the time to break even.

[@tothemax225]

@@aodhanloki This helps a lot, thanks!

[@AlfredoMancuso]

Solid stuff Rayner!

[@crystalball020]

Love from Pakistan!

[@mcr5577]

1 million subs LFG!!!

[@tragrea9488]

Exactly it's a bitter truth bro

[@noebordy5646]

so pleased I watched this. all i see on trading is risk reward and i watched so many vids trying to make sure i understand it. thanks

[@yossananjeamsaksiri9238]

how can I know the win rate?

[@lonesurvivor815]

do a backtest on tradingview

[@KingJT80]

trade your setups and see what your win rate is.