What is the risk to reward ratio of the signals? - PB

The risk reward typically varies from 1:1 to 1:3 depending on the price movement.
It is important to note that risk:reward is generally misunderstood. Risk - reward cannot be looked at in isolation, it must be considered along with win rate. The combination of these two (along with Lot size) is proportional to actual profit. For example, we could use a RR of 1:2 but if the win rate was 30% we would overall make  a net loss. Whereas, if the RR was 1:0.5, but the win rate was over 67% then we would make a net profit. The key to maximizing profit is to get the best balance of win rate and RR. For the strategies we use the win rate is usually 1:1. We do sometimes increase this for the different strategies that we use or when the markets are strongly trending but if you look at the current price movement, it is very limited with small daily ranges. This means that there is no point using a large RR because the TP will never be reached.

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