#RiskRewardRatio

For me, I always commit to a goal of at least 1:3 as a risk-to-reward ratio. This means that I do not enter any trade unless the potential return is at least three times greater than the expected loss.

What tools do I rely on?

I use the Fibonacci Retracement tool to determine my price targets (Take Profit) and stop-loss levels (Stop Loss). I also utilize the ATR (Average True Range) indicator to assess market volatility and adjust the levels accurately.

The impact of using this ratio on my trading

When I started strictly adhering to this ratio, I noticed a significant improvement in my results. Small losses no longer have a substantial impact on the account, while winning trades cover the losses and maintain steady capital growth.

Practical example: In one of my trades on the BNB coin, the entry price was $310, the stop loss was at $305, and the target was $325. The ratio was approximately 1:3, and indeed the target was achieved, which boosted my confidence in this strategy.