Who this is for — Anyone boasting 1:4 theoretical R/R but banking 1.2R. Dynamic R/R measures what happens **after** active management, partials, and moved stops.
Dynamic risk/reward is the ratio between actually borne risk and realized profit at trade close — different from static R/R written pre-click. Critical with active management and partial exit.
In plain terms — Promise on paper vs bank account — track both in the journal.
Drift example
| Phase | R/R |
|---|---|
| Pre-trade | Stop −10, target +30 → 1:3 |
| Post BE + 50% at +15 | Residual risk ↓, partial profit |
| Ex post | E.g. +0.5R max heat, +1.8R banked → ~1:3.6 dynamic |
The useful review number is net R realized vs max R risk taken.
Journal: two columns
- Theoretical R/R — entry plan
- Net R realized — full close
Systematic gap theoretical > realized → management eating edge or early exits.
Typical mistake — Comparing ex post payoff to ideal pre-trade R/R — different metrics.
Example — Theoretical 1:2.5; average realized +1.1R with max heat −0.7R → dynamic ~1.6:1 — ok if playbook-consistent.
Summary card
- Track: theoretical R + realized R.
- Review: average monthly gap.
- Link: ex post payoff ratio.
Silver path — Management module. Index: Silver path.