#RiskRewardRatio

# **#RiskRewardRatio: The Key to Smart Trading Decisions**

The **#RiskRewardRatio** is a fundamental concept every trader should master. It compares the potential profit of a trade to the potential loss, helping you evaluate if a trade is worth the risk. For example, a 1:3 ratio means risking $1 to potentially earn $3. Successful traders use this ratio to **plan entries, exits, and manage risk** effectively. A strong risk-reward strategy ensures that even with a few losses, profitable trades can keep your portfolio growing. Remember, consistency in applying the right ratio can be more powerful than chasing big wins. Trade smart, not just often.

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