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
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.
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