#RiskRewardRatio

Understanding the #RiskRewardRatio is crucial for profitable trading! It's calculated as: \frac{\text{Potential Loss}}{\text{Potential Profit}}. For example, risking $100 to potentially gain $300 gives a 1:3 ratio. Aim for ratios greater than 1:1 (ideally 1:2 or higher).

Tools like stop-loss orders and take-profit levels help define these points. Indicators like support/resistance, trendlines, and Fibonacci retracements can assist in identifying entry and exit points for favorable risk-reward setups.

Trade wisely!