Risk reward ratio

As many traders saying that it is important to set up your risk reward ratio during the trading so i can strongly agree. 

But the question is which risk reward ration we should use???

 Some people use 1:1, 1:2, 1:3 and so on. It depends how much money you have to invest and how big you are going to risk.

I did calculations how many winning or loosing trades i have. An average is 70 % winning trades, 30 % losing trades however if your losses will be bigger amount than profits the total balance can be negative.

I choose the strategy when i am trading only by looking 30 min, 1h charts. 1,15,30 min charts for me only needed before i place the order. The key chart is 30 min where i can identify main support/resistance levels and also the trend. I call 1,5,15 min chart volatility changes as a noise. 

If you trade in a short period charts you have to set up your risk reward ration  according to the volatility depth. For example if you are looking to the 5 min chart: evaluate first what is the depth of the volatility and then place SL and TP levels. Best working risk reward is 1:1.

Over the few months i have tried another method. You can see it below in 30 min chart.  Right now i am looking for the bigger gains but also i am risking more. In order to protect my order from "volatility noise" most of the time i use around 200 pips SL level. In this particular example i placed my SL above the previous resistance level. I do it for the reason because smaller SL level can be risky and price volatility can eat your order straight away if you will place SL level for example 30, 40, 50 pips. Don't forget that SL at 40,50 pips is very good known by other players and they can move the price to your stop loss level and then price will go down to your expected direction. You will be mad because you placed too tight stop loss:).

To set up my take profit level i use the same 30 min chart. My goal is to identify strong support level below. I use support level as EXIT point, sometime i put TP level little bit above support level to be more confident.

THE MAIN RULE IS: BE PATIENT!!! to wait for the 1:3 risk reward ration is complete it is a very big psychological fight with yourself:) If the price moves to your expected direction, you can always pull down SL level to the actual order "0" level or even to the profitable level.

After this set up i usually stop watching my screen because it takes time to gain such a profit. If you will be watching your trade over 30 minutes you can go crazy and your plan will fail because of YOUR PSICHLOGY. It is high chance that you can change your decision 30 times over the 30 minutes so please avoid it:)  calm down and wait. If you loose, you loose, if you gain your target you will be more than happy.