Risk and Reward Ratio

Understand the idea

Risk/reward compares planned loss with a proposed gain. A 1:2 plan risks one unit to seek two. It does not tell you the likelihood of reaching the target or whether the strategy has positive expectancy.

A decision to think through

A distant target gives an attractive ratio on paper, but a nearby resistance zone may make it unrealistic. Check the chart rather than moving the target merely to improve the ratio.

Try it through free practice

Review win rate, average win, average loss, fees, and slippage together. One winning trade is too little evidence to establish an edge.

• Explain the evidence available before the outcome.
• Read the feedback and identify one change to your process.
• Revisit the decision later and check what you remember.

Your next free learning challenge

Play the free risk-sizing game. Make five decisions, read the explanation after each answer, and try to state the condition in your own words. First-time correct decisions earn skill XP; later reviews check what you remember. You can then apply the idea in a chart round and inspect the replay. All games, levels, written lessons, and feedback are free, with no signup or real money.