Dynamic Risk to Reward

[AbeSmith 10]

Anyone use dynamic risk to reward, where let's say, you choose a 1:2 risk to rewards setup, but take your profit at 1:1, because at this point, technically, you are risking 2 to get 1, if you count your profit as risk.

 

Probably the best way I think is to take some profit at 1:1, and leave some runners perhaps. Or, move your stop to break even or near break even, though that really depends on your entry. Sometimes it might be best to just exit or tighten your stop closer to current price rather than move it to breakeven.

[BlowFish 10]

I have always though RR varies with each tick though seems surprisingly little material on the subject.

[AbeSmith 10]

I have always though RR varies with each tick though seems surprisingly little material on the subject.

 

Yes. There is surprisingly little material on dynamic risk to reward. Actually I have not read any except one poster mentioned it in another forum.

[MidKnight 12]

Absolutely agree - to me it does vary as the trade progresses, both in terms of price movement and the tape. My choice has been to compensate for the uncertainty by scaling-out. Moving away from absolutes (ie my risk is always X, my target is always X, my R/R per trade is X) and moving towards grey definitions. The market is not perfectly absolute with foresight, so my trading needn't be either

 

 

With kind regards,

MK

[BlowFish 10]

One general observation... It seems like a justification to trail a stop, to keep the RR within certain parameters. Personally I use market structure but you could use dynamic RR.