Is It Logical to Trade with a 1:1 Risk/Reward Ratio Using Only One Lot Size for Each Trade?

This is a very generic question with a lot of missing details, and I mean a lot. Even the word 'logic' doesn't really play a role in trading, so let's break this down.

1:1 Ratio vs. Win Rate

A 1:1 risk/reward ratio can work for some traders, and while it is achievable, it typically leans towards having a better-than-50% win rate over a large sample size to make consistent profits in the long term.

Risk Management and Lot Size

Using only one lot size in trading, especially for traders with small accounts, can be extremely risky. For instance, if you have a tiny account, say a few hundred dollars, using a single lot would be too risky, as a single 10-pip stop loss could wipe out your account quickly.

However, this is not the only factor involved. It's important to consider other details like your stop loss distance, trade management, and whether you are trailing your stop, going breakeven, taking partials, or setting and forgetting. Each of these elements can significantly impact your trading success and risk profile.

The Role of Risk Management

Professional and responsible trading involves risk management. Instead of using a fixed lot size, it's advisable to risk according to a percentage of your account. This helps ensure that you don't bleed all your capital away from a string of bad trades.

If you have a few hundred dollars and lose a 10-pip stop loss on a single lot, you might be finished. On the other hand, a massive account won't see significant gains if you trade with only one lot.

Trading Strategies and Edge

Trading is not about logic; it's about having an edge and playing the probabilities. The market follows its own whims and doesn't care about your lot size, account size, entry, or stop loss. The goal is to milk your winners by letting them run and manage your trades effectively.

Regarding your losers, try to cut them short and never move your stoploss further or add to losing positions. These are just a few ways to manage your trades, but this advice is based on my opinion. I am not a financial adviser, and you are responsible for your trading decisions.

Conclusion

While a 1:1 risk/reward ratio can theoretically work for traders with a better-than-50% win rate, it is just one part of a larger risk management, using a percentage of your account as risk, and understanding your edge are key to successful trading.

Remember, trading is extremely risky, and most people lose their capital. Therefore, tread carefully and be responsible with your trading decisions. Don't trade with money you can't afford to lose.

Final Thoughts and Conclusion

In summary, while a 1:1 risk/reward ratio can be achieved, it's more important to have a well-rounded approach to risk management and an understanding of your trading edge. The key is to focus on what works for you and to be responsible with your trading decisions.