Exiting on an opposite signal versus a fixed target: which do you trust?
A fixed target exits when the market reaches your number; an opposite-signal exit waits for the market to tell you the trade is done. Both have failure modes: targets cap winners, signals arrive too late.
Which do you run?
- your primary exit logic
- how the two compare in your results
- the trade that made you switch
The risk-reward guide frames the comparison.
Background: Risk-reward ratio, win rate and expectancy: the maths behind a trading edge
A high win rate can still lose money. See how win rate and risk-reward combine into expectancy, with break-even win rates and worked examples.
What is a good risk-reward ratio in forex?
There isn't one right ratio. What matters is expectancy, the win rate and ratio together. A 1:2 ratio breaks even at about 33% winners before costs, while a 1:1 ratio needs 50%.
How do you calculate trading expectancy?
Multiply the win rate by the average win and subtract the loss rate multiplied by the average loss. Measuring wins and losses in multiples of the amount risked (R) makes the result easy to compare.
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