#RiskRewardRatio The risk-reward ratio, also known as the risk-return ratio, is a financial metric that compares the potential risk of an investment to its expected return, expressed as a ratio (e.g., 1:2 or 1:3). It helps investors assess whether the potential reward justifies the risk. It helps investors make informed decisions about their investments and manage their risk more effectively. Traders use the risk-reward ratio to determine whether a trade is worth taking, considering the potential profit against the potential loss.