Risk/Reward (RR)
NeutralReliability: HighAlso called · RR, reward to risk
The ratio of the profit you're aiming for to the loss you'll accept. It only means something alongside your hit rate.
How to spot it
- (target − entry) ÷ (entry − stop)
- At RR 2, a 40% hit rate is still profitable
Why this shape forms
How much you can lose against how much you can make on one trade. This drives the end result more than win rate does.
Where it actually means something
It only means something calculated before entry. Moving the stop after you are in makes the number meaningless.
What else to check
The chart sets the stop and resistance sets the target. Dragging the stop closer to hit a nicer ratio just gets you cut faster.
This means you're wrong
The moment you move your stop, the RR you calculated is meaningless.
The mistake beginners make
Bragging about hit rate alone. Losing big and winning small shrinks the account even at 70%.
Easy to confuse with
A high reward-to-risk lets you be right less often. A poor one loses money over time even with a high win rate.
Real examples from the community
Patterns are probabilistic tendencies, not guarantees. This is not investment advice.