#RiskRewardRatio

Hashtag: #RiskRewardRatio

The #RiskRewardRatio is one of the most critical concepts in trading. It helps you measure how much risk you’re taking compared to the potential reward. For example, if you risk $100 to gain $300, your risk-reward ratio is 1:3. A good ratio varies depending on your strategy, but most traders aim for at least 1:2. By consistently targeting better reward than risk, you can remain profitable even if only a portion of your trades are successful. Always calculate your ratio before entering a trade, and never risk more than you can afford to lose. Smart traders never ignore the power of this metric.