#RiskRewardRatio The risk-reward ratio is a fundamental concept in trading and investing, comparing the potential profit of a trade to its potential loss. It's calculated by dividing the amount of capital at risk by the net profit expected. A favorable risk-reward ratio, often expressed as 1:2 or higher, suggests that the potential gains outweigh the potential losses, making the trade more attractive. This ratio helps traders and investors assess the viability of a trade and manage their capital effectively. By prioritizing trades with a positive risk-reward ratio, individuals can aim for profitability over the long term, even if not every trade is successful.#RiskRewardRetio