#RiskRewardRatio is a key concept in trading that compares the potential loss (risk) of a trade to its potential gain (reward). It helps traders evaluate the profitability of a trade setup before entering a position. A common benchmark is a 1:2 ratio, meaning the potential reward is twice the potential risk. This ratio promotes disciplined trading by ensuring that gains outweigh losses over time. By consistently targeting favorable risk-reward ratios, traders can maintain a positive edge even with a lower win rate. It's a fundamental part of any sound trading plan. #TradingStrategy #ProfitManagement