Great question!
Risk to Reward Ratio (RRR) simply means how much you're willing to risk vs how much you aim to gain. Here’s how to calculate it:
1. Entry Price: The price where you buy.
2. Stop-Loss: The price where you’ll cut the loss if it goes wrong.
3. Target Price: Your profit goal.
Formula:
👉 (Target - Entry) ÷ (Entry - Stoploss) = RRR Example:
Entry: $1.00
Stop-loss: $0.95 (risk = $0.05)
Target: $1.15 (reward = $0.15)
➡️ RRR = 0.15 ÷ 0.05 = 3:1
This means you’re risking $1 to gain $3 — solid trade!Always aim for at least 2:1 to stay profitable even if some trades fail.
Pro Tip Never enter a trade where your loss is bigger than your potential gain.Discipline with RRR will save your capital and grow your account slowly but surely