#RiskRewardRatio

The risk-reward ratio on Binance—or in any trading context—is a way to measure the potential profit of a trade compared to the possible loss. It helps traders make smarter decisions by evaluating whether a trade is worth taking.

🧮 How it works:

Risk = The difference between your entry price and stop-loss price.

Reward = The difference between your entry price and target profit price.

Risk-Reward Ratio = Risk ÷ Reward

📌 Example:

If you enter a trade at $100, set a stop-loss at $95 (risk = $5), and your target is $115 (reward = $15), your risk-reward ratio is:

5 / 15 = 1:3

This means you're risking $1 to potentially make $3. Most traders aim for a 1:2 or 1:3 ratio or better, depending on their strategy.

On Binance, you can calculate and monitor this using charting tools in the Advanced Trading View or by manually setting up your stop-loss and take-profit orders.