And Why is R So Important to Understand?
R in Trading is an
objective way to think about
success or
failure in a trade. R expresses the (possible)
return on a trade as a multiple of the
risk taken on by that trade.
In my
trading log, I register the amount of R I make. Also in my trading videos and ideas, I always talk about targets, for example, as 2R or 3R. You may have wondered why I am doing that. Why don’t I just talk about pips, points, or dollars risked, won or lost on a trade?
To answer these questions in full, we need to dive more deeply into the concept of R in trading. We will look into
Risks,
Returns,
Probabilities and how these relate. Let’s go!
