#RiskRewardRatio and #RiskRewardRatio

Success in trading does not only depend on predicting the correct direction, but on how you manage risks and returns. Here the concept of #RiskRewardRatio plays a crucial role, as it is a fundamental measure for evaluating any trade. Simply put, what are you willing to lose compared to what you aim 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 emotions drive your decisions—let ratios and numbers be your guide.