#RiskRewardRatio

One of the key tools in my trading strategy is the risk-reward ratio. I calculate it simply: I divide the potential profit by the potential loss. For example, if I am willing to risk $100 for a potential profit of $300, my R:R = 1:3.

To evaluate entries, I use technical analysis: support/resistance, Fibonacci levels, RSI, and, of course, volume. I set the Stop Loss below a key level, and Take Profit at the next significant level.

This ratio provides a clear understanding of whether the trade is worth the risk. Even if I win only 40% of the time, but the average R:R = 1:3 — I still remain in profit.

The risk-reward ratio has changed my approach: I stopped entering trades based on 'gut feeling' and started thinking like a systematic trader. This is the foundation of rational trading, not a game of chance.