📘 Day 8 — Risk-Reward Ratio (The Math Behind Profitability)
Most traders focus on win rate.
Professionals focus on risk-reward.
Let’s understand why.
🔹 What Is Risk-Reward Ratio?
Risk-Reward =
How much you risk vs how much you aim to gain.
Example:
Risk = $10
Target = $20
That is 1:2 Risk-Reward
🔹 Why This Matters
Imagine 10 trades:
You risk $10 per trade.
You use 1:2 RR.
You win only 5 trades (50%).
Losses = 5 × $10 = –$50
Wins = 5 × $20 = +$100
Net Profit = +$50
Even with average win rate,
you grow.
🔹 Now Compare 1:1 RR
Risk $10
Target $10
Win 5 trades:
Losses = –$50
Wins = +$50
Net = $0
You work hard… and go nowhere.
🔹 Key Lesson
High win rate without good RR
= No growth.
Moderate win rate + Strong RR
= Long-term profit.
🧠 Professional Rule
Never enter trade without knowing:
• Stop loss
• Target
• Risk amount
• Risk-Reward ratio
If RR is bad → Skip trade.
Discipline > Excitement.#StrategyBTCPurchase
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