#RiskRewardRatio (RRR) measures potential profit against potential loss per trade. It's calculated as **Reward ÷ Risk**. For example, a 1:3 RRR means you risk $1 to gain $3.

A **higher RRR** (e.g., 1:5) offers better profit potential but may have lower win rates. A **lower RRR** (e.g., 1:1) requires higher accuracy but reduces losses.

**Ideal RRR?** Depends on strategy. Scalpers may accept 1:1, while swing traders aim for 1:3+. Always align RRR with your win rate and risk tolerance.

*Key Rule:* Never risk more than 1-2% of capital per trade.