#RiskRewardRatio

**Category:** Investing / Trading / Financial Analysis

**100-word summary:**

RiskRewardRatio is a key metric used by traders and investors to evaluate the potential return of an investment relative to its risk. It is calculated by dividing the expected profit by the potential loss on a trade. For example, a ratio of 3:1 means the potential reward is three times greater than the risk. This strategy helps determine whether a trade is worth taking and supports disciplined decision-making. A favorable risk-reward ratio can enhance long-term profitability even with a lower win rate. Effective use requires proper market analysis, risk tolerance assessment, and consistent application.

**Hashtags:**

#RiskRewardRatio #SmartInvesting #TradingStrategy #riskmanagementdeepdive #ProfitPlanning #InvestorMindset