Risk Reward in Trading

The concepts of risk reward can be challenging.

It's a bit mathematical and we all know math is the part that many people struggled with in school.

But, actually risk reward is incredibly simple. There are only a few aspects you need to understand.

Simply put the risk reward ratio can be calculated by taking the potential profit expressed as a percentage and divide it by the potential risk expressed as a percentage.

Though obviously, a risk reward of 100 is not always better than a risk reward of 1.

Often, high risk rewards have a very low win rate, and low risk rewards have a very high win rate.

If you want to learn more about this topic, just checkout out this guide to risk reward ratio in trading.