Evolving R: Key Concept

• Dynamic Risk/Reward Ratio: As you gain profit, your risk/reward ratio (RRR) changes.
• Risk of Additional Profit: When you’re in profit, it’s not a "free trade." Seeking extra profit means risking not only your initial potential loss but also the profit you’ve already made.
• Adaptation: Continuously adapt your RRR to reflect these changes, avoiding unnecessary risks for marginal gains.

Key Message

When in profit, your RRR evolves, making it essential to recognize that additional profit pursuit increases overall risk, including potential loss of existing profits.

When the trade seems to be slowly reversing on you and the evolving R is less than 0.5, that’s when you START TO CONSIDER an early exit and securing profits.