#RiskRewardRatio

The risk-reward ratio measures potential profit against potential loss per trade (e.g., 1:3 means risking $1 to gain $3). In crypto’s volatile markets, RRR is critical:

1. **Why It Matters**:

- Protects capital by ensuring gains outweigh losses long-term.

- Mitigates emotional decisions; forces disciplined exits.

2. **Crypto-Specific Challenges**:

- Extreme volatility skews RRR calculations.

- Sudden pumps/dumps can trigger stop-losses or invalidate targets.

3. **Best Practices**:

- Aim for **≥1:3 RRR** to offset crypto’s unpredictability.

- Use stop-loss orders and adjust targets based on market cycles.

- Factor in fees, slippage, and liquidity (critical in altcoins).

4. **Adaptability**: Tighten RRR in bear markets, loosen in bullish trends.

A strong RRR strategy paired with position sizing (e.g., risking 1-2% per trade) is key to surviving crypto’s turbulence.