Library term·Risk & sizing
Risk-Reward Ratio (R:R)
The expected profit of a trade divided by its potential loss. A 1:3 ratio means a $1 risk is taken to make $3.
Authored by·Editorially reviewed
Onur Erkan YıldızFounder, Financial Engineer · CMB-licensed
Higher education in Financial Engineering and Money & Capital Markets. SPK (Turkey CMB) licence. 16 years across institutional markets, research, and quant-driven analytics.
Why it matters
With a 1:3 average R:R, you can be wrong 65% of the time and still make money. With 1:1 you need a >50% hit rate just to break even (after spread/commission). R:R compounds the edge of the system far more than win-rate alone.How we surface it
Every setup published in the Radar carries an explicit R:R derived from the entry, stop-loss, and TP1 the model proposed. We sort against R:R as a secondary filter so flat-EV trades don’t crowd the list.Realistic targets
- 1:1 — only acceptable for high win-rate scalping systems with very tight risk.
- 1:1.5–1:2 — bread and butter for most swing setups.
- 1:3+ — pattern + key level confluence; reserve for A+ setups.
What R:R is not
A high R:R doesn’t make a trade good — it makes a good trade worth taking. If your stop is unrealistic (too tight) or your TP is wishful (too far), the R:R math is just a vanity metric.
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Educational content authored by our team — informational only, not investment advice.