Money Management And Spread - Forex Forum

I'm still developing my money management strategy, but I still haven't been able to find an answer for my questions. Here is my question...I want to know how to account for the spreads that brokers charge so that I can keep a true 2:1 (or more) risk to reward ratio. I will use a real example...let's say I'm using the Daily strategy (buy/sell once every 24 hours), and I see EUR/AUD says Sell and the Stop loss is +40 pips and the Take Profit is -80 pips. So let's also say that the Sell price (when my position gets open) is @ 1.6300. I notice when the trade gets executed it deducts the spread so my p/l (profit/loss) is negative of the spread. So back to the example...let's say the spread is 6.0 pips, which means the open price (after the order is executed) is @ 1.6300 but I immediately have a p/l of minus 6.0 pips. Here are my questions...



1) With the Signals generated, I set my get profit level (-80 pips) based on the open price of 1.6300...if I want a risk to reward ratio to be 2:1 then...where does the spread come into play? What about the negative 6pips spread? Will the currency pair ACTUALLY have to come down 86 pips (which is more than the Signal predicted) versus 80 pips in order to meet the get profit levels? In which case how do I compensate for this?



2) With the Signals generated, I set my stop loss at +40 pips...but with the loss of the spread (initially) I'm actually 15% closer to my stop loss because of the loss of the spread brings the price down to 1.6294...right? In which case how do I compensate for this?