ForexGen | Risk Reward Ratio

Risk reward ratio is simply the amount you risk as compared to the
amount you expect to make.
If you have a stop in place which limits your risk to $1000 but when
your trade is successful you expect to make $3000 then your risk to reward ratio is 3:1 From the table above you can see that if you only selected trades where you thought you had a 3:1 risk reward ratio, then even if you were right only 50% of the time you would still make a profit.