#RiskRewardRatio The risk-reward ratio (RRR) is one of the most important tools I use in trading.

To calculate it, I follow a simple formula:

Risk-Reward Ratio = Potential Loss / Potential Profit

For example, if I enter a trade where I risk $50 to potentially gain $150, my RRR is 1:3. This means for every $1 I risk, I expect $3 in return. I usually aim for a minimum ratio of 1:2 or higher.

Tools I use:

TradingView for plotting stop-loss and take-profit levels.

Position size calculators to manage risk accurately.

Backtesting strategies to see how they’ve performed with specific RRR setups.

Benefits I've seen:

I avoid emotional decisions during trades.

It keeps me disciplined and consistent.

Even with a lower win rate, I can still be profitable if my RRR is solid.

Using the risk-reward ratio has made me a more strategic and confident trader.