Risk-to-Reward Ratios: Why 1:1 is for Amateurs (And Other Uncomfortable Truths)

Look, I’m going to be straight with you. If you’re still trading 1:1 risk-to-reward ratios in 2025, you’re not a trader. You’re a financial masochist with a demo account mentality and a TikTok education.

I’ve seen it a thousand times. Fresh-faced retail traders, armed with nothing but a YouTube course and a sense of misplaced confidence, walking into the Forex market thinking 1:1 is “conservative.” It’s not. It’s lazy. It’s the trading equivalent of showing up to a gunfight with a water pistol and calling it a “strategic disadvantage.”

Let me explain why, and more importantly, what actually separates the winners from the bankruptcy queue.

The Maths Doesn’t Lie (Even If Your Broker Does)

Here’s where most people’s brains short-circuit: they confuse simplicity with profitability.

A 1:1 ratio means you’re risking £100 to make £100. Sounds fair, right? Wrong. Dead wrong.

Let’s do the actual sums. Say you’re 55% win rate (which is actually decent for retail traders, if we’re being generous). Over 100 trades:

1:1 Ratio Setup:

• 55 wins × £100 = £5,500
• 45 losses × £100 = -£4,500
• Net profit: £1,000

Sounds nice. Now, what about a proper 1:3 ratio?

1:3 Ratio Setup:

• 55 wins × £300 = £16,500
• 45 losses × £100 = -£4,500
• Net profit: £12,000

That’s not a typo. You’ve just increased your profitability by 1,200% by simply adjusting your targets. Same win rate. Same number of trades. But suddenly, you’re making serious money instead of pissing about with coffee-money profits.

This is why 1:1 traders never break through to actual income replacement. They’re mathematically handicapping themselves from day one.

The Psychology of 1:1: The Gateway Drug to Account Destruction

Here’s what I’ve observed from two decades of watching traders blow themselves up:

1:1 traders are the most psychologically fragile creatures in the market. They feel like they’re winning because they’re hitting their targets frequently. But that’s a trap—a beautiful, seductive trap.

When you’re consistently hitting 1:1 targets, your brain releases dopamine. You feel smart. You feel in control. But you’re not. You’re just winning small amounts while occasionally losing big amounts when the market decides to pull back and hit your stops.

Then comes the real killer: revenge trading.

A 1:1 trader loses a few trades in a row, sees their account drop 15%, panics, and suddenly abandons their system. They increase position size, lower their stops, or skip entries because they’re “waiting for the perfect setup.” None of this ends well. I’ve watched this cycle destroy more accounts than I can count.

1:3 traders, on the other hand, have the psychological luxury of losing more often while still remaining profitable. They can take more losses, be pickier about entries, and actually stay calm because they know their maths works. Confidence isn’t arrogance when it’s backed by a 1:3 ratio.

The Professional Standard (And Why It Matters)

You want to know what actual professional traders use? Not your Discord trading group. Not your prop trading firm’s marketing material. I’m talking about the traders managing billions at hedge funds and investment banks.

Most serious operations work with minimum 1:2 ratios, and many prefer 1:3 or better.

Why? Because they’ve done the same maths I just showed you. They understand that in a probabilistic game played over thousands of rounds, your ratio is more important than your win rate. A 40% win rate with a 1:3 ratio will destroy a 70% win rate with a 1:1 ratio.

The professionals also understand something else: market structure.

When you’re drawing your support and resistance levels correctly, placing stops at logical points, and identifying real targets based on technical structure, you rarely end up with 1:1 setups. You end up with 1:2.5, 1:3, sometimes 1:4. That’s not luck. That’s competence.

If every trade you’re taking is 1:1, it suggests one of two things: either you’re artificially cutting your targets short (stupid), or you don’t actually have a proper trading plan (also stupid, but worse).

The Real-World Caveat (Because I’m Not a Complete Wanker)

Now, before you go off thinking I’m suggesting you should be taking 1:10 ratios on every setup—no. That’s degenerate gambling dressed up as trading.

The size and ratio of your trade should depend on:

• Market structure – How far away is the actual resistance? Is the potential R:R even realistic?
• Volatility – On a quiet Tuesday in the Asian session, you might only get 1:2. During NFP, maybe you get 1:5 if you’re quick.
• Your account size – You scale appropriately. A 1:3 ratio doesn’t mean you’re getting rich overnight; it means you’re not deliberately limiting your upside.
• The instrument – Some pairs offer better structure than others.

The point isn’t to force a 1:3 ratio on every single trade. The point is to stop arbitrarily limiting yourself to 1:1 because you read some beginner’s blog that called it “conservative.”

The Truth Nobody Wants to Hear

Most retail traders fail because they’re fundamentally afraid of money. They’ve been conditioned by years of fear-mongering (“protect your capital!”) and broken systems to think that risk is the enemy.

It’s not. Unmanaged risk is the enemy. A 1:1 ratio is still risk—you’re just not being paid for it.

The traders who actually make money respect their risk, but they’re not afraid of it. They take calculated risks with proper ratios because they understand that’s where the money actually is.

A 1:1 trader will never be wealthy. Ever. It’s mathematically impossible for them to build real money unless they’re trading massive size, at which point they’re just one bad week away from a margin call.

The Closing Bell

Here’s your action item: Go back to your last 20 trades. Calculate what your P&L would have been if you’d used a 1:2 or 1:3 ratio instead of 1:1.

Don’t tell me. Just do it. And then sit with that number for a while.

That’s not hypothetical profit you’re leaving on the table. That’s real money—money that could have changed your account trajectory, built your confidence, and proved that your edge actually works.

Stop trading like an amateur. Your ratio is the single easiest variable you can control to improve your profitability.

Everything else—indicators, chart patterns, economic calendars—is just noise compared to getting your risk-to-reward maths right.

Now stop reading blogs and go fix your setup.

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This post was written by someone who’s seen fortunes made and lost. If you disagree with this, excellent. You’ll make a great case study for my next article.