#RiskRewardRatio

The risk-reward ratio measures potential profit against potential loss in a trade, guiding traders to assess if a position is worthwhile. A favorable ratio (e.g., 1:3) means targeting gains three times the risked amount. This metric ensures that winning trades offset losses over time, even with a 50% success rate. Key steps:

1. Set stop-loss levels (linked to #StopLossStrategies) to define risk.

2. Establish profit targets aligned with technical analysis or support/resistance zones.

3. Avoid trades with skewed ratios (e.g., risking $2 to gain $1).

By prioritizing high RRR, traders enhance long-term profitability and discipline, balancing market unpredictability with strategic risk management