Reward to risk

The idea

Planned potential gain divided by planned loss, before costs unless stated.

Try the scenario

Entry100 stop96 target108 gives planned reward:risk of 2.

Check your understanding

Which statement is supported by this definition?

• A 2:1 ratio guarantees positive expectancy.
• Planned potential gain divided by planned loss, before costs unless stated.
• This concept guarantees the next five candles.

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