Orders & trading
What is Risk-reward ratio?
Hinglish mein padhein: Risk-reward ratio kya hota hai?
The risk-reward ratio compares how much you could lose (entry to stop-loss) with how much you aim to gain (entry to target).
A 1:2 ratio means risking ₹1 to try to make ₹2. With that ratio you can be right only 40% of the time and still come out ahead before costs.
Targets must be realistic; a great ratio on paper is useless if the target is rarely reached.