#RiskRewardRatio
The risk-reward ratio (RRR) is a ratio that compares the potential risk of an investment to its potential profit. It's a tool that investors use to evaluate the potential for gain or loss.
Risk-reward ratio
What it is
A comparison of risk to reward
How it's calculated
Divide the potential loss by the potential gain
What it shows
How much profit you can expect for every unit of risk you take
Why it's useful
Helps you manage risk and maximize profit