# Forex Videos

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## A Simple Exercise to Illustrate the Power of Risk Reward Ratio in Forex

January 31, 2018 at 9:11 by K. Prabhu

There is a simple formula for absolute guaranteed long-term profitability and that is your wins must be bigger than losses. Your system needs to win half of the times. So, you don't need to worry about losing streaks, etc. You just need to win half of the time. This video illustrates a very simple exercise that you can do at home at no cost. All you need is

1. Piece of paper.
2. Pen
3. Coin.

Then,

Toss the coin 10 times.
• If the coin lands on the opposite side — take a £ symbol.
• If the coin lands on your side and you win the toss, take £2.
• Repeat for 10 sets.

Now, we calculate the total of each set and then the grand total, which is £38. As long as you stick to your chosen side, and you have that positive risk to reward ratio, you will win in the long run. So, the lesson here,

• The markets can ultimately go 2 ways: up or down.
• If your system has a consistent approach and is based on high probability changing, then there is one simple way to make sure you profit from it.
• If your wins are bigger than losses, and you win at least half of the time, than you are guaranteed to be a profitable trader.
• You will take losses.
• But, if you can remain consistent while exercising high probability trading and positive risk to reward ratio, you will beat the markets.