#RiskRewardRatio Love it—#RiskRewardRatio is every trader's compass.

What It Is:

The Risk/Reward Ratio (R/R) measures how much potential reward you’re aiming for, compared to how much you're willing to risk.

Formula:

R/R Ratio = (Target Profit - Entry Price) / (Entry Price - Stop Loss)

Examples:

2:1 Ratio

Risking $100 to potentially gain $200. Solid baseline for many strategies.

3:1 or higher

More selective trades, higher reward potential—but possibly lower win rate.

Pro Tips:

A win rate of 50% with a 2:1 R/R still puts you ahead.

Combine with stop-loss and position sizing to control your risk exposure.

Tools like TradingView or Thinkorswim let you plot R/R visually when planning trades.

Want to break down the R/R on a current trade idea or backtest a strategy? Just say the word.