#RiskRewardRatio

RiskRewardRatio is a fundamental concept in trading that helps investors evaluate potential profit against possible loss before entering a trade. It’s calculated by dividing the expected loss (risk) by the expected gain (reward). A common benchmark is a 1:3 ratio—risking $1 to potentially gain $3. #RiskRewardRatio encourages disciplined decision-making, ensuring trades are based on logic, not emotion. It helps traders avoid overexposing their capital and manage risk more effectively. By consistently applying favorable ratios, traders can stay profitable even with a lower win rate. Understanding and using #RiskRewardRatio is key to long-term success in volatile markets like crypto or forex.

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