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#RiskRewardRatio **Risk-Reward Ratio in 100 Words**
The **Risk-Reward Ratio (RRR)** measures potential profit against possible loss per trade. A **1:3 ratio** means risking $1 to gain $3, ensuring profits outweigh losses over time. Traders use RRR to set **stop-loss** and **take-profit** levels objectively. For example, buying a stock at $100 with a $95 stop-loss ($5 risk) and $110 target ($10 reward) gives a **1:2 RRR**. Consistency with positive RRRs (even with 50% win rates) leads to profitability. Avoid trades with poor ratios—discipline is key! #RiskReward #TradingPsychology #WinSmart #TradeLikeAPro #RiskManagement #ProfitMindset
The **Risk-Reward Ratio (RRR)** measures potential profit against possible loss per trade. A **1:3 ratio** means risking $1 to gain $3, ensuring profits outweigh losses over time. Traders use RRR to set **stop-loss** and **take-profit** levels objectively. For example, buying a stock at $100 with a $95 stop-loss ($5 risk) and $110 target ($10 reward) gives a **1:2 RRR**. Consistency with positive RRRs (even with 50% win rates) leads to profitability. Avoid trades with poor ratios—discipline is key! #RiskReward #TradingPsychology #WinSmart #TradeLikeAPro #RiskManagement #ProfitMindset
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