question about 1r risk to 2r reward

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So let's say the current account is 10.000

I risk 1% per trade so that is 100 .

So I place a buy trade that has a 8 pip stop loss and my take profit is 16 pips away from entry..so that is a 1r risk to 2r reward..so when I place the trade I risk to lose 100  or to make 200 .

So if price goes down and hits my stop loss I loose the 1% ,that means -100.

If my trade goes up and hits my take profit I win the 2r meaning 200 .  My question is this: Is this 200 (2r) my win on top of the 100(1r) that I risked ? or is it my 1r risked  given back + 1r that I won =2r ?

So if i win the trade where i risk 1r to make 2r I should have now 3r ? Right ?

 
mge0rge:

So let's say the current account is 10.000

I risk 1% per trade so that is 100 .

So I place a buy trade that has a 8 pip stop loss and my take profit is 16 pips away from entry..so that is a 1r risk to 2r reward..so when I place the trade I risk to lose 100  or to make 200 .

So if price goes down and hits my stop loss I loose the 1% ,that means -100.

If my trade goes up and hits my take profit I win the 2r meaning 200 .  My question is this: Is this 200 (2r) my win on top of the 100(1r) that I risked ? or is it my 1r risked  given back + 1r that I won =2r ?

So if i win the trade where i risk 1r to make 2r I should have now 3r ? Right ?

Hello , im detecting football bettor vibes :)

As the margin is released you end up with 10200 if you win ,9900 if you dont win.

Then your RiRe 1:2 becomes 102:204 if you win or 99:198 if you dont win.

There is also a BreakEven ,where you lose nothing by placing a stop loss at the open price after price moves in profit. (Depending on slippage , volatility ,broker stop limits etc).

 
Football bettor vibes indeed..this idea came to me and it stuck with me for a few days and could not wrap my head around it .. thing is that in football when you get odds of 2 you place 100 to make 200 or loose -100..but you actually make 100 profit + 100 back that you already owned..so in 10 000 x 1% = 100 ,place 100 on an odds of 2 to get 200 ..now your capital is 9900 and wait for the result..the result comes in and you win , you get 200 so 9900+200=10100 ,so the profit is 100 ,not 200
 
mge0rge:
Football bettor vibes indeed..this idea came to me and it stuck with me for a few days and could not wrap my head around it .. thing is that in football when you get odds of 2 you place 100 to make 200 or loose -100..but you actually make 100 profit + 100 back that you already owned..so in 10 000 x 1% = 100 ,place 100 on an odds of 2 to get 200 ..now your capital is 9900 and wait for the result..the result comes in and you win , you get 200 so 9900+200=10100 ,so the profit is 100 ,not 200

Ive gone through the exact same thought process in the past :) 

 
Lorentzos Roussos:

Ive gone through the exact same thought process in the past :) 

So in theory..haha..trading should be much more profitable than betting..right ?

..and one other thing ..can you explain to me why are things different in trading than betting ? when at first glance should be the same ?

 
I think that the confusion comes from the odds ,decimal or fractional ...and odds of 2 decimal translates to a 1/1 fractional ,where and odds of 3 would translate to 2/1 - and this is what we were looking for
 
mge0rge:

So in theory..haha..trading should be much more profitable than betting..right ?

..and one other thing ..can you explain to me why are things different in trading than betting ? when at first glance should be the same ?

Yes in theory its much easier ,but ,we dont get draw odds in fx :D . Unless theres some weird binary options "contract"

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