Risk:Reward (อัตราส่วนความเสี่ยงต่อผลตอบแทน)

Risk:Reward compares the amount you are willing to lose on a trade with the amount you hope to gain. It is written with risk first, like 1:2 or 1:3.

Simple example

You buy EURUSD at 1.1000.

• Stop Loss at 1.0950, so your risk is 50 pips.
• Take Profit at 1.1100, so your potential reward is 100 pips.

The ratio is 50 : 100, which simplifies to 1:2. If the trade hits the target, you gain twice what you would have lost.

Why it matters

The ratio works together with how often your trades win. With a 1:2 ratio, if you win exactly 1 trade in 3 and lose 2, you finish at break-even before costs like spread. With a 1:1 ratio, you would need to win more than half of your trades to come out ahead. A better ratio does not guarantee profit. It only shows how much room you have for losing trades.

Common beginner mistakes

• Setting a very large target just to make the ratio look good, even though price is unlikely to reach it.
• Looking only at the ratio and ignoring how often the trade idea might work.
• Moving the Stop Loss further away after entering, which makes the real risk bigger than planned.
• Forgetting that spread and fees slightly worsen the ratio.

Calculate Risk:Reward before you open a trade, not after.