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The Risk-to-Reward Ratio (R:R)
This measures how much you risk compared to how much you
expect to earn.
● 1:1 → You risk $10 to make $10
● 1:2 → You risk $10 to make $20
● 1:3 → You risk $10 to make $30
Elite traders aim for at least 1:2 or higher, meaning every winning
trade covers two or more losing trades.
Example:
You lose 4 trades (-$40 total)
You win 2 trades (+$60 total)
➡ Still profitable — because your risk/reward was in your favor.
