#RiskRewardRatio #RiskRewardRatio

Success in trading does not only depend on predicting the right direction, but also on how you manage risks and returns. Here the concept of #RiskRewardRatio comes into play; it is a fundamental measure for evaluating any trade. Simply put, what are you willing to lose against what you hope to gain? A smart trader does not enter any trade unless they are sure that the potential return logically outweighs the risk. A ratio of 1:2 or 1:3 is considered ideal in many strategies. Even if you lose more than you gain, you can still end up profitable at the end of the month thanks to this ratio. Do not let emotion drive your decisions—let the ratios and numbers be your guide.