Kardec TraderFutures Trader. Creator of The Midas Touch. Mentor

Every Trader Overlooks THIS Formula (MUST WATCH)🚨

13 Nov 2025 · 1 min

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Short transcript from a trading video arguing that traders misunderstand 'risk-to-reward' and should instead focus on lowering risk (reward-to-risk). Using numeric examples (e.g., $4 reward / $2 risk), the speaker shows that reducing risk produces larger proportional improvements (exponential effect) than equivalently increasing reward (linear effect). The central advice: prioritize reducing risk per trade over solely increasing potential reward.

Chapters

Risk to reward. It's called risk to reward, but it's actually reward to risk. Because when people say risk to Reward, it's like two to one, but the reward is two times and your risk is one. So you're risking, say $1 to make $2. Say, for example, four to two. For example says two to one. So you are focusing on increasing your reward right here. But that is kind of a linear growth. But if you focus on lowering this, this will go up exponentially. Take two scenarios. The first scenario is going to be you increase your reward by $1. That means it goes from 4 to $5 and the risk remains the same $2. In this case, your risk to reward is say 2.5. And the going to be you keep the reward the same, which is $4. You reduce the risk by $1. This was 4, 1 right here and kept it the same. This is 4 and 2 minus 1. In the first case, I added 1 to the reward. The risk to reward is 2.5. In the second case, I kept reward the same. I reduced the risk by $1. It's $4 mathematics. So it's more worth your time to focus on lowering your risk.