Focusing on the pure technical side of trading (leaving out the common obstacles of trading emotions and trading psychology), there are 3 keys to successful Forex trading and profitable trading strategies; Position Sizing, Win to Loss Ratios and Risk to Reward Ratios. This post and the linked video are dedicated to the importance of risk to reward (or reward to risk) and to help you understand how essential the principle is in profitable Forex trading.

A Key to Successful Forex Trading

Outweighing potential risk with potential reward is a key to profitable Forex trading. Ensuring that each trade has potentially a higher reward than potential risk allows Forex and other traders to have a lower Win to Loss ratio and still be profitable, strong risk to reward ratios can also stretch traders and potentially gain higher returns.

Banking big earning trades is not easy though, many traders struggle with letting profits 'run' and find high risk to reward trades emotionally challenging. My solution has always been to have a clear set of back tested rules that I can rely on, if I want to make money long term I have to stick to the rules, even if that means holding positions.

My Success Relies on High Reward to Risk Trades

Some of my Forex trading strategies only average a 40% win (on average only 4 out of 10 trades are profitable) but when trading a 1:3 risk to reward ratio I can potentially gain a return of 6% every 10 trades when risking 1% per trade (6 loses = -6%, 4 wins at 1:3 = 12%, -6% + 12% = 6% ROI).

If you haven't already, please check out my trading results, I owe my high returns to my ability to trade high risk to reward ratios, in the past I have banked as high as 1:10 risk to reward. You can learn more about my trading results by reading my Forex Trading Signals page and my Forex Trading Results page.

BIG Reward to Risk makes me Happy!

I am a very unemotional trader, loses don't change my emotional state, nor do winners... BIG winners do though! The greatest satisfaction I receive from any trading related activity is closing big profitable trades, I love it!

The video below demonstrates how powerful reward to risk trading can be...

Check out my other TRUTH about Forex Trading videos...



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*There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Samuel Morton, and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for Forex trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information.You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of Samuel Morton and may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading Forex, Options on Forex, and any retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Samuel Morton and is not an investment advisory service, is not an investment adviser, and does not provide personalised financial advice or act as a financial adviser. exists for educational purposes only, and the materials and information continued herein are for general informational purposes only. None of the information provided in the website is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement, recommendation or sponsorship of any company, security, or fund. The information on the website should not be relied upon for purposes of transacting securities or other investments. You hereby understand and agree that Samuel Morton and does not offer or provide tax, legal or investment advice and that you are responsible for consulting tax, legal, or financial professionals before acting on any information provided herein.

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