#RiskRewardRatio Before entering any trade, ask yourself one thing: Is the reward worth the risk? That’s where the Risk/Reward Ratio comes in — one of the most important tools in a trader’s mindset.

The Risk/Reward Ratio measures how much potential profit you’re aiming for compared to how much you’re willing to lose. For example, if you risk $100 to potentially gain $300, your ratio is 1:3. The higher the reward compared to the risk, the better the trade setup — simple as that.

Successful traders don’t chase every opportunity; they look for trades where the reward clearly outweighs the risk. A common rule? Aim for at least a 1:2 or 1:3 ratio. This way, even if you lose some trades, the profitable ones more than make up for it.

Pair this strategy with stop-loss orders and position sizing, and you’ve got the foundations of disciplined, smart trading.

So next time, don’t just ask “Can I win?” — ask “Is it worth it if I lose?”