When you first started trading, you probably focused on just winning trades. But as you grow, it’s no longer about how many trades you win—it’s about how much you make when you win vs. how much you lose when you're wrong.
That’s where the risk-to-reward ratio (R:R) comes in.
🧠 What Is Risk-to-Reward?
It’s the comparison between:
Risk: How much you're willing to lose on a trade
Reward: How much you're aiming to gain
If you risk $50 to make $150, your R:R is 1:3.
📊 Why It Matters
Even if you win only 40% of your trades, a 1:3 risk-to-reward setup can still make you profitable in the long run. That’s because your winners make up for your losers.
Here's a quick example:
Win Rate | R:R | Still Profitable? |
50% | 1:1 | Break-even |
40% | 1:2 | Yes ✅ |
30% | 1:3 | Yes ✅ |
📌 How to Apply It in Real Trades
Plan Before You Enter
Set your stop loss and take profit levels before clicking “Buy” or “Sell”.Stick to Your Plan
Don’t move your stop loss unless you're trailing it for profits.Use Tools
Use the cTrader platform to measure R:R easily on your charts before placing a trade.
🔁 Pro Tip: Make R:R a Habit
Every time you place a trade, ask:
“Am I risking $1 to make at least $2?”
If the answer is no, either adjust your take profit, tighten your stop, or skip the trade.