The Risk/Reward Ratio (or Risk-Return Ratio/RR) is a measurement set that helps traders determine how much can be gained or lost if progress proceeds as planned. Remember this example. The risk/reward ratio is 2:1 while your 'take-profit' is 100 pips while your stop-loss is 50 pips. As a result, you can break-even on at least one out of three transactions, provided that they are successful. Traders can often review these two factors in tandem to make sure they meet benefit targets. Using a risk-free demo trading portfolio would be the only way to fully prevent losses in Forex trading. By utilizing the new real-time knowledge and data, you will be able to trade without risking your own money. This is the perfect place for traders to learn how to sell, and to practice their latest techniques for advanced traders.

The risk reward ratio is often used by investors so as to measure what is the risk involved in relation to the possible rewards that can be attained. Hence it is a helpful risk management tool which many traders use.