#RiskRewardRatio When I was inexperienced, I traded based on emotions.
Now, every trade starts from one formula:
Risk:Reward ≥ 1:2
If I accept a risk of $100, then the potential profit must be from 200$ and above.
Does not meet this ratio? Skip.
How I calculate:
- Determine the entry zone
- Identify a reasonable stop loss (below support/resistance)
- Predict TP based on price structure & volume profile
- Calculate RR = (TP - Entry) / (Entry - SL)
Good RR + high probability of winning = trade worth entering
Good RR + low probability = wait for additional signals
Poor RR = eliminate immediately
Trading is not about guessing correctly – it is about choosing the most advantageous bets in the long run.