#RiskRewardRatio
The **Risk-Reward Ratio (RRR)** is a key trading concept used to evaluate whether a trade is worth taking. On Binance, you can calculate it manually or use tools like TradingView integrated into Binance.
---
### **What is Risk-Reward Ratio?**
**Formula:**
`Risk-Reward Ratio = Potential Loss / Potential Profit`
**Example:**
- You **buy BTC at $30,000**
- You set a **stop-loss at $29,000** (risk = $1,000)
- Your **take-profit is at $33,000** (reward = $3,000)
**RRR = 1,000 / 3,000 = 1:3**
This means you risk $1 to potentially gain $3 — a favorable trade.
---
### **How to Use RRR on Binance**
1. **Plan your trade before entering:**
- Entry price
- Stop-loss (where you cut your loss)
- Take-profit (where you cash out)
- Then calculate RRR.
2. **Use the built-in chart (TradingView on Binance):**
- Use the **"Long Position"** or **"Short Position"** tool.
- Drag it to set stop-loss and take-profit levels.
- It automatically shows your RRR on the chart.
3. **Manual calculation:**
Just plug your numbers into the formula.
---
### **Tips for Using RRR in Strategy:**
- Aim for at least **1:2** or **1:3** ratios.
- Combine with **win rate** — even if you win only 40% of trades, a 1:3 ratio can still be profitable.
- Avoid low RRR trades unless you have a high probability of success.
---
Want a risk-reward calculator or a quick example in a real BTC setup today?
