A must for every Trader Risk Reward Ratio

The risk-reward ratio in trading is a crucial concept that helps traders evaluate the potential risks and rewards of a trade. It's defined as the ratio of the potential loss (risk) to the potential gain (reward) of a trade.The risk-reward ratio is typically expressed as a ratio, such as 1:2 or 1:3, which means that for every unit of risk, the potential reward is two or three units, respectively.For example:- If you risk $100 to make a potential profit of $200, the risk-reward ratio is 1:2.- If you risk $500 to make a potential profit of $1500, the risk-reward ratio is 1:3.A higher risk-reward ratio indicates a potentially more profitable trade, but it also means that the trade carries higher risk. Traders use the risk-reward ratio to determine the potential profitability of a trade and to set stop-loss and take-profit levels accordingly.