#RiskRewardRatio

One of the key factors for 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 make a profit of $300, the risk-to-reward ratio is 1:3, which is an excellent ratio. The goal is not just 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.