What Is Risk-Reward Ratio – And Why Most Traders Ignore It

📊 A good trader doesn’t just chase profits — they manage risk. That’s why understanding the Risk-Reward Ratio (RRR) is crucial. 🔹 RRR = Potential Profit / Potential Loss For example: Entry at ₹100, Target ₹115, Stoploss ₹95 Reward = ₹15, Risk = ₹5 → RRR = 3:1 ✅ ✅ Golden Rule: Never take trades with RRR below 1:2 Higher the RRR, more margin of error you have 📌 Example: You can lose 6 out of 10 trades and still be profitable with 3:1 RRR 🧠 As a Research Analyst, I never recommend trades with poor RRR — even if the probability looks good. Quality setups come with balanced risk.