PnL can lie to a trader, especially when account size changes. RR makes trades comparable. A 2R winner and a 1R loss tell a clearer story than random pounds, dollars, or points.
Separate planned RR from realised RR
Planned RR is the trade idea before execution. Realised RR is what actually happened after management, partials, early exits, slippage, or rule breaks. Both numbers matter.
- Planned RR shows whether the setup had enough room
- Realised RR shows whether trade management helped or hurt
- The gap between them often reveals early exits or poor target discipline
Use R to compare different markets
A futures trader, forex trader, and crypto trader can all review trades in R even if their account sizes, contracts, and currencies are different.
- Track risk per trade as 1R
- Convert results into R-multiple as well as account currency
- Review setups by average R, not just win rate
Combine RR with mistake cost
A high RR strategy can still fail if the trader breaks rules. Track the R lost to early entries, late exits, revenge trades, overtrading, and invalid setups.
- Compare clean losses against broken-rule losses
- Track whether a mistake reduced a winner from 2R to 0.5R
- Use the next review to repair one management rule