Risk
What is Risk/Reward Ratio?
Comparing how much you could lose vs. how much you could gain
Full Explanation
Before any trade, calculate: if I'm wrong, how much do I lose? If I'm right, how much do I gain? A 1:3 ratio means you risk $1 to potentially make $3.
Pro Tip
A higher ratio isn't automatically better — it depends on your win rate. A 1:2 ratio with a 60% win rate can outperform 1:3 with 35% wins. What matters is the combination of both.
Related Risk Terms
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