#RiskRewardRatio The Risk-Reward Ratio (RRR) is a metric used by traders and investors to assess the potential profit of a trade relative to its potential loss. It's calculated as:

Risk-Reward Ratio = Potential Loss / Potential Profit

Example:

If you're risking $100 to potentially make $300, your RRR is:

RRR = 100 / 300 = 1:3

This means you're risking $1 to potentially make $3.

Key Points:

A lower RRR (e.g., 1:3) is generally better, as it implies more reward for less risk.

A good rule of thumb for many traders is to aim for a minimum RRR of 1:2 or 1:3.

It doesn't guarantee profitability—win rate also matters.

Want me to show how to calculate RRR with real trade data or charts?