tradThis one comes up often enough to deserve its own topic. It is usually put like this: « I place every trade at 3R, my journal shows an average ratio of 1.4, and yet my orders are always placed the same way ».
The gap does not come from the orders. It comes from what is being counted.
The 3R you announce is an ENTRY ratio: it describes the order at the moment it is placed. The ratio in your journal is an EXIT ratio: it describes what actually happened. Those are two different measurements, and the gap between them is precisely what a journal exists to make visible.
Three things eat the difference, and all three are measurable in your own journal.
Early exits. A trade closed by hand at 1.2R when the target sat at 3 does not count as a failed 3R: it counts as a successful 1.2R. This is by far the most common cause.
Stop moves. Pulling a stop up tightens the denominator of the ratio. It therefore inflates on winners and flattens on losers, which distorts the average in both directions at once.
Slippage. On futures at the session open, one tick at entry and one at exit are enough to shave several tenths off a theoretical ratio.
What we look at first, on a journal that raises this question: the share of trades exited before the target while the MFE, the maximum favourable excursion, had already reached it. When that share is high, the entire gap sits there, and everything else is noise.
That number cannot be guessed, and it cannot be remembered. It has to be measured.