#RiskRewardRatio #RiskRewardRatio is a fundamental concept in trading and investing that compares the potential loss (risk) to the potential gain (reward) of a trade. Expressed as a ratio (e.g., 1:3), it helps traders evaluate whether a trade is worth taking. A 1:3 ratio means risking $1 to potentially earn $3. Successful traders aim for higher reward ratios to ensure long-term profitability even with lower win rates. By analyzing the risk-reward ratio before entering a position, investors can make more informed, disciplined decisions. It’s a key metric for managing risk, optimizing strategies, and maintaining a favorable edge in any financial market.