R-multiple targeting: how do you choose your target?

FTC Community TeamStaff17 Sept 202616 views

Targets in R — 1R, 2R, 3R — turn the exit into a multiple of the risk rather than a pip guess. Choosing the multiple means balancing win rate against payoff, and the data decides.

R-multiple targeting: how do you choose your target? — risk-reward diagram — A risk-reward ratio of 1 to 2

What's your target?

the R multiple you aim for
how you derived it from your results
how the target changes by setup or regime

R-multiple targeting: how do you choose your target? — pip movement diagram — How a pip moves the exchange rate

The risk-reward guide explains the trade-off behind the choice.

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.

Read the full guide

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