##RiskRewardsRatio
Whether you’re trading stocks, crypto, or making bets, the Risk-Reward Ratio is a key tool for achieving long-term success. It shows the potential profit you're targeting in comparison to the amount you're willing to risk.
Example:
If you risk $100 for the chance to earn $300, your risk-reward ratio is 1:3 — meaning for every $1 you risk, you aim to gain $3.
Why it’s important:
- Helps manage emotional decision-making
- Ensures your losses are smaller than your profits
- Enhances your strategy over time
Savvy traders don’t just go for wins—they focus on risk management. Even with a 40% win rate, a solid risk-reward ratio can keep you in the green.
