I’m a first-time poster but have been lurking for about six months. I’m currently in my second month of trading small amounts through Oanda and I’m down about $5 on a $40 account as I try to find my trading system.
One thing I keep thinking about is that a 1:3 risk-to-reward ratio just doesn’t fit the trades I usually find and take. For example, I had a loss of -$0.36 this morning because I entered a bit too early. A slightly wider stop loss might have been a safer option.
I know that scalping small amounts can be high stress, but Monday is my only day off, and I have a few hours to look for trades after the New York open. I feel like this is the best way to practice.
Many sources suggest that a 1:3 RR is the gold standard, but I find it often sets my stop loss too close or my take profit too far away. I’d love to hear from more experienced Forex traders about their thoughts on setting stop losses and take profits.
I’m also very open to constructive criticism! I’m just glad to be here and have already learned so much from this community.
Looks like you’re jumping in without waiting for confirmation. That’s a quick way to get stopped out for no reason. You need some proof that what you think is gonna happen is actually starting to happen.
It could be a specific candlestick, a candlestick pattern, a trend line break, or an indicator signal—something that shows it’s really turning before you dive in.
For this trade, a trend line break or a break and retest of the pullback’s trend structure could’ve been solid entry confirmations, for example.
And like others have said, make sure your targets are based on the chart, not just fixed ratios. You can keep those ratios in mind, but don’t just use them as your target unless you’ve got nothing else to guide you for that setup.
Don’t just set every take profit at 3:1 or 2:1—it needs to make sense on the chart. Your take profit should be at a significant support or resistance level, or a moving average, preferably the 50 or the 200. If you had picked the low of the day from the day before, you would’ve hit your target. Each take profit should be adjusted based on the situation. Use the charts, not just the ratios…!!!
You should also focus on your entries. Taking a short at a major level on a big timeframe (like 4 hours) is a risky trade. The price was likely to reverse, and you can see the bullish momentum building on the 15-minute chart too.
Try using a 1:1 BE strategy, you only need %40 accuracy to be protiable at 1:3. Also, trading is not a “part time thing” or “passive income”. It takes full time dedication to be successful.
Maybe aim for a 1:1.2 risk-to-reward ratio (your win rate needs to be at least 50% for this to work). Once you hit that 1:1.2, move your stop loss to break even and let it run. You can keep raising the stop loss higher when you can. Just a suggestion…
Having a 1:3 risk-to-reward ratio isn’t just about moving your stop loss closer to your entry to make it fit; it’s about closing your trades or taking trades that naturally give you that 1:3 RR. That doesn’t mean you should force your strategy to only take 1:3 RRs—there are people who make money with 1:2 or even 1:1 RRs. You just need to find what works best for your strategy.
