#RiskRewardRatio

**#RiskRewardRatio Simplified**

The Risk-Reward Ratio (RRR) is a crucial concept in trading and investing that helps you measure potential profit against possible loss. It’s calculated by dividing your expected loss (risk) by your potential gain (reward).

**Example:**

If you risk $100 to make $300, your RRR is 1:3 — meaning for every dollar you risk, you aim to earn three.

**Why It Matters:**

- Helps you assess if a trade is worth taking.

- A higher RRR can mean fewer wins are needed to stay profitable.

- It encourages discipline and smarter trade setups.

**Pro Tip:** Aim for a minimum of 1:2 or better, and always pair it with solid stop-loss strategies.