The Risk-Reward Ratio compares how much you risk on a trade to how much you aim to gain. A 1:3 ratio risks one unit to make three.
How traders use it
- A higher reward-to-risk lets you win less than half and still profit.
- Set it before entering, from your stop and target.
- Aim for at least 1:2 on most setups.
See it in dtcharts
Test your risk plan risk-free in the dtcharts terminal with paper trading.