#RiskRewardsRatio

1. Calculation method:

Each trade has an entry, stop-loss and take profit pre-determined.

Risk = (Entry price − Stop-loss price)

Reward = (Take profit price − Entry price)

Risk-reward ratio = (Reward) / (Risk)

2. Indicators and tools:

With this ratio evaluation:

ATR: To determine market volatility and gap effects.

RSI and Bollinger Bands: To understand market overbought/oversold and current trends.

3. Impact on trading decisions:

This method limits the probability and loss of trades, helps in determining the correct position size and keeps emotions under control.

Thus, using the risk-reward ratio and related indicators, informed and planned decisions can be made in Friends please follow me and like my post .