Do you want to win more and lose less? Understand a simple rule: the risk-to-reward ratio.
In every trade you enter, you must ask yourself: How much am I willing to lose? And how much do I expect to gain? This is where #RiskRewardRatio comes into play.
If you risk 10$ for a profit target of $30, then your ratio is 1:3. This means that even if you lose two trades and win one, you can still come out ahead!
The best traders don’t always win, but they wisely balance profit and loss. A golden rule? Don’t enter a trade unless your ratio is 1:2 or better.
Quick tips:
Use analysis tools to accurately determine entry points, stop-losses, and targets.
Don’t sacrifice your rationality due to greed.
Stick to the plan, and don’t chase the market.
Do you use the risk/reward ratio before entering your trades? Share your strategy with us!
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