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LESSON: How I Personally Manage Risk Reward

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[op_liveeditor_element data-style=””][text_block style=”style_1.png” align=”left” font_size=”16″ font_font=”Montserrat” font_color=”%237e7e7e”]The bigger your risk reward is on average, the more money you are going to make keeping your win rate high. When I make a pre-trade on how I am going to manage the trade, I will always first assess what the market is like. My trade management is decided by the type of market I am entering into.

The reason for this is because market type dictates everything after entry!

Something that is often missed and I want to be clear about is that; when I am talking about risk reward and I am saying terms such as ‘average’ or ‘overall’, I want you to think about your risk reward a bit similar to how you do your trading edge and not just the trade right in front of you, but over a large amount of trades and what your risk reward averages out to me.

You may have just had a huge 10 / 1 risk reward winner on your last trade, but is that your normal average?

This is SUPER important because if you split your positions up and as we are about to go into, then it is important you do not make the huge mistake a lot of traders often make that is – managing trades all the same way, in different types of markets, when we should be using this information.

The three types of markets I look for are:

• Ranging
• With trend
• Against trend

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