If you’re serious about trading with the Sonic System, there’s one concept you need to fully understand: risk-to-reward. This simple ratio is one of the most powerful tools in your trading arsenal—and ignoring it is a fast track to inconsistent results.
The Golden Rule: 1:1 or Better
The foundation of any strong trading strategy is a balanced or favorable risk-to-reward ratio. At minimum, you should aim for 1:1—risking the same amount you’re aiming to gain.
A slightly higher risk (say, 1.1:1) can be acceptable in certain setups, but anything heavily lopsided—like risking 3 times what you hope to earn—puts you at a serious disadvantage.
Let’s be clear:
One bad trade should never erase the progress of three good ones.
That’s why these skewed setups aren’t a fit for the Sonic methodology.
Practical Setup Using ATR
A reliable way to manage your trades is by using the Average True Range (ATR). Here’s how to apply it within the Sonic System:
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Stop Loss: 0.9x to 1.0x ATR
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Profit Target: 1.0x to 1.5x ATR
This keeps your stops tight enough to protect capital, but wide enough to allow the market some movement. Overstretching your target—like setting it to 10x ATR—often means you’ll miss the mark entirely.
The Best Trades Don’t Hesitate
There’s a clear pattern we’ve observed over the years: Winning trades tend to go in your favor almost immediately.
If your trade starts hesitating or moving sideways right after entry, it’s often a sign of weakness. Consider exiting early rather than letting it run all the way to your stop. Preserving capital—even by taking a small loss or breakeven—is part of long-term success.
On the flip side, if the market starts pushing in your direction quickly and decisively, that’s usually a good sign the setup is working.
Don’t Overtrade—Preserve Your Edge
Another trap? Overtrading. It’s tempting to keep going after a few wins, but more trades don’t always mean more profits.
In fact, many traders give back gains by continuing into slower market periods or chasing setups out of boredom. With the Sonic System, less is often more. Focus on quality over quantity.
Final Thoughts
Trading isn’t just about entries and exits—it’s about discipline. And nothing tests that discipline more than how you manage risk and reward.
Stick to:
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A 1:1 or better risk-to-reward ratio
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ATR-based stop/target planning
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Quick trade evaluation (exit early if needed)
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A limit on the number of trades per session
These simple rules can dramatically improve your performance.
Start Trading the Right Way
Ready to put structure behind your strategy? Visit DayTradeToWin.com and sign up for a free member account. You’ll gain trial access to our exclusive tools like the ABC software and our full Sonic System.
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