Why risk:reward ration 2:1?

Just want to add. I use initial r/w based on support and resistance and the price bars where I enter. I never really understood the whole fixed targets either and stop losses but I guess some make it work.

Stops will change for me based on what stock im playing. Some stocks you gotta let breath some more, others, you can keep on a tight leash. Sometimes there will be great r/w but position sizing will still have to be smaller simply because of volitility.

I truly believe each stock has its own personality. Some are easier to play than others and you got to treat each one differently based on its past behavior.
 
2:1 ratio can be easily defined as ...... are you taking a dumbass weak set-up or a good solid setup. Wanting to short LVS the last 4 days would fall into the dumbass set-up.... Wanting to go long IMCL set-ups the last 3 days would be another dumbass set-up.

It's very simple buy upside reversals on strong trending stocks to the upside and short bouncing reversals on diving stocks.
 
So far, from so many posts, Rhody Trader's is the only one that brings something to this discussion. And, by the way, the OP wanted to say "reward:risk ratio 2:1", not the other way around...

Trend following systems, to make up for the smaller percentage of winners, need higher reward/risk ratios. Options sellers have higher percentage of winners, but (quite often) lower reward / risk ratios (1/5, 1/10, etc.).

As Rhody wrote, you need a consistent trading method / system, positive expectancy and enough trades.
Quote from Rhody Trader:

The results of a trading method, system, etc. comes down to two primary factors:

1) Win %
2) Winner/Loser Ratio (R)

If you have a sufficiently high Win % you can have an R of below 1 and do quite well for yourself. It's basically a question of expectancy.

There is actually a third factor in system performance which is trade frequency. You could have an extremely high expectancy, but in frequent trades, the overall profits might not be worth the effort.
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I use some risk to reward strategies of 2:1 (or reward to risk of 1:2 as you meant to say). I use systems which have 75-80% win percentages using 2:1
 
Quote from ProgrammerGuy:

wow you have 740 posts and you believe this???

WOW!
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OMG WOW 3l33t3 posts by u programmer guy!!! OOHH AAHHH, for a "programmer guy" the very fact that you connote # of posts related to trading knowledge is at best, not very programmer like.

Mr. Programmer Guy, I make money. I hope you do the same. Good luck.
 
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