#RiskRewardRatio Mastering the risk-reward ratio is key to smarter trading. To calculate it, divide potential profit by potential loss-aiming for at least 1:3. 1 use Fibonacci retracement to set precise profit targets and stop-losses, ensuring trades align with this ratio. This disciplined approach filters out low-probability setups, enhancing profitability. For instance, risking $100 on a stock, I hit a $300 gain by sticking to my 1:3 target. Tools like moving averages or RSI can also refine entries, but Fibonacci remains my go-to.