#RiskRewardRatio

One of the key elements of success in trading is understanding and applying the risk-to-reward ratio. This ratio helps you determine whether a trade is worth the risk or not. For example, if you risk $100 to achieve a profit of $300, the risk-to-reward ratio is 1:3, which is an excellent ratio. The goal is not only to make a profit but to ensure that the potential reward is worth the risk. Using this ratio in your trading plan helps you make more rational and strategic decisions, rather than random ones.