#RiskRewardRatio The risk-reward ratio is a metric used in investing and trading to compare the potential profit of a trade to the potential loss. It's a key part of risk management.

Formula:

Risk-Reward Ratio = Potential Loss \ Potential Gain

Example:

If you're risking ₹100 to potentially gain ₹300, your risk-reward ratio is 1:3.

How to Interpret:

1:1 — risk and reward are equal.