#RiskRewardRatio

The Risk/Reward Ratio is a key factor in capital management when trading. It helps traders determine in advance the acceptable loss compared to the expected profit from each trade. For example, if you accept a risk of 100$ to earn 300$, then the R:R ratio is 1:3 – a fairly ideal level. Maintaining a good R:R ratio allows you to lose many small trades but still be profitable overall if the winning trades are large enough. Don't just look at the entry point; always set reasonable stop-loss and take-profit levels to optimize profits.