2️⃣🔤Trading Risk Reward Ratio (R:R)

How to measure the R:R (risk-reward) ratio?

The risk is simply defined as the price distance between your entry and your stop loss.

The reward is simply defined as the price distance between your entry and your take profit.

In essence, in order to calculate the risk-reward ratio you only need three components:

- Entry Price

- Stop Loss

- Take Profit

R:R (Risk Reward Ratio) = Total Risk / Total Reward

For example:

#XBT Long Signal

Entry: 9000

Target: 10000

Stop loss: 8800

👉Risk on position: (9000-8800)/ 9000=2.2%

👉R:R: (9000-8800)/ (10000-9000) = 1:5