#RiskRewardRatio **Risk-Reward Ratio (100 words)**

The Risk-Reward Ratio is a key metric in trading and investing that compares potential profit to potential loss. It’s calculated by dividing the amount a trader stands to lose (risk) by the amount they expect to gain (reward). For example, a 1:3 ratio means risking $1 to potentially earn $3. A favorable risk-reward ratio helps traders make smarter decisions by ensuring the potential gains outweigh the losses over time. Consistently using this ratio promotes disciplined trading, filters out low-probability setups, and improves long-term profitability. Successful traders often aim for ratios of 1:2 or higher to maintain a strong edge.