Risk-to-Reward Ratio Explained– Everything You Need to Know!
Key Takeaways •The risk-to-reward ratio compares the planned potential loss with the targeted profit before a trade is opened. •Traders calculate the ratio using their entry, stop-loss, and take-profit levels. •Risk-to-reward and win rate should be assessed together when evaluating a trading strategy. •Predefined exit levels can help traders follow their plan instead of making […]