Understanding the risk/reward ratio is key for any trader aiming for long-term success. Before entering a trade, I always ask myself: "What am I risking vs. what can I gain?" A good rule of thumb is a minimum 1:2 ratio, meaning I risk $1 to potentially gain $2. This helps filter out trades that aren't worth it and reduces emotional decision-making. It's not just about winning more trades—it's about maximizing profits when right and minimizing losses when wrong. Always calculate the risk before the reward, not the other way around. That’s how pros stay ahead.
