#RiskRewardRatio

⚖️ Risk/Reward Ratio: the balance between risk and return

The risk/reward ratio measures the relationship between the expected gain and the potential loss on an investment. 📊

To calculate it, simply divide the risk taken (possible loss, often defined by a stop-loss) by the expected gain. 💰

A ratio of 1:3 means you risk €1 to try to earn €3. The higher this ratio, the more attractive the opportunity. 🚀

This strategy helps make rational decisions, better manage emotions, and optimize profitability in the long term.

In summary, aiming for a good risk/reward ratio means protecting your capital while maximizing your chances of success. ✅