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What is Risk-Reward Ratio?

The risk-reward ratio (R:R) compares the potential loss (distance to stop loss) against the potential gain (distance to take profit) of a trade. A 1:2 R:R means the potential profit is twice the potential loss. Higher ratios indicate more favorable trade setups.


Related terms

  • stop loss
  • take profit
  • win rate

Frequently asked questions

What is Risk-Reward Ratio in trading?+

The risk-reward ratio (R:R) compares the potential loss (distance to stop loss) against the potential gain (distance to take profit) of a trade. A 1:2 R:R means the potential profit is twice the potential loss. Higher ratios indicate more favorable trade setups.

How does Risk-Reward Ratio apply to SignalFloor signals?+

Risk-Reward Ratio is used throughout SignalFloor when providers publish and track trading signals. Browse the marketplace to see risk-reward ratio concepts applied to live, verified trade ideas.

What terms are related to Risk-Reward Ratio?+

Related concepts include stop loss, take profit, win rate. See the SignalFloor trading glossary for full definitions.


See risk-reward ratio in live signals

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