#RiskRewardRatio **#RiskRewardRatio** is a core concept in trading that helps you evaluate whether a trade is worth taking based on potential loss vs. potential gain.

### **What is Risk-Reward Ratio (RRR)?**

It’s the ratio between how much you *risk* and how much you *expect to gain*.

**Formula:**

`Risk-Reward Ratio = Potential Loss / Potential Profit`

### **Example:**

- You enter a trade at $100.

- Stop-loss is at $95 (risking $5).

- Take-profit is at $115 (potential gain is $15).

**RRR = 5 / 15 = 1:3**

You're risking $1 to potentially make $3.

### **Why It Matters:**

- A good RRR means you don’t need to win all the time to be profitable.

- With a 1:3 RRR, even if you’re right only 33% of the time, you can still make money.

### **Tips:**

- Aim for at least **1:2 or higher** depending on your strategy.

- Combine RRR with **win rate** for a full edge.

- Don’t force trades to fit a ratio—look for setups that naturally align.

Want a simple RRR calculator or a risk management cheat sheet?