A comparison of how much you stand to lose on a trade, measured to your stop-loss, with how much you aim to gain, measured to your target. A ratio of 1:2 means the target is twice as far away as the stop.
Lesson
Risk-reward ratio
A comparison of how much you stand to lose on a trade, measured to your stop-loss, with how much you aim to gain, measured to your target. A ratio of 1:2 means the target is twice as far away as the stop.