#RiskRewardRatio #Risk-Reward Ratio = Potential Loss / Potential Gain

Or more commonly phrased as: Risk-Reward Ratio = (Entry Price - Stop Loss) / (Take Profit - Entry Price)

Example:

Entry Price: $100

Stop Loss: $95 (risking $5)

Take Profit: $115 (aiming to gain $15)

RRR = 5 / 15 = 1:3

This means for every $1 risked, you expect to make $3.