#RiskRewardRatio #RiskRewardRatio

In a world dominated by greed and fear, the wise trader asks himself..

Is this trade worth the risk?

This is the most important question.

The Risk-Reward Ratio is the compass that guides the trader towards smart trades.

It is simply a comparison between what you might lose if the trade fails, and what you might gain if it succeeds.

If the ratio is 1:3, this means you are risking one dollar to make three.

And if it is 1:1, you are gambling more than you are trading, because the profit does not cover the loss in the long run.

The wise trader does not just ask: Is this trade profitable?

But asks: Is it worth the risk? Does the reward justify the gamble?

This ratio is the backbone of capital management strategy.

So do not risk your money before ensuring that the ratio is in your favor.

What do you think of this ratio? Do you use it in your trades?

Share your opinion with us, as your words may be a light for others, a point for you in this world, and a reward for you in the hereafter.