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<p id="isPasted">While a 1:1 risk/reward ratio can be used, it's generally not considered optimal for long-term profitability in trading. A 1:1 ratio means the potential profit is equal to the potential loss, requiring a very high win rate to be consistently profitable. Higher ratios like 1:2 or 1:3 are often preferred because they allow for more losses while still achieving overall profitability. </p>
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<p id="isPasted"><strong>Advantages of a 1:1 Risk-Reward Ratio</strong></p><ul><li>Increased Win Rate and Consistency: A 1:1 ratio (risking $1 to make $1) can help increase your win rate, as trades are more likely to reach their target profit. </li><li>Alignment with Market Probabilities: The 1:1 RRR can align with market probabilities, potentially leading to more consistent outcomes. </li><li>Discipline and Emotion Reduction: This ratio encourages disciplined trading by helping to avoid overtrading and emotional decisions, as the focus shifts to making profitable trades over time. </li><li>Capital Preservation: By focusing on trades with positive mathematical expectation, a 1:1 RRR helps preserve capital, especially when paired with …</li></ul>
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