#RiskRewardRatio Risk reward ratio is a fundamental concept every trader and investor should understand. It measures the potential profit of a trade against the potential loss, helping you make more informed decisions. A solid strategy focuses on finding setups where the reward outweighs the risk—like risking $100 to potentially gain $300. This discipline encourages consistent, calculated choices rather than emotional reactions. By maintaining a favorable risk reward ratio, you protect your capital and increase the odds of long-term success. It’s not about being right every time, but about making sure your wins outweigh your losses when you are.