Back to Glossary
General TradingR
Reward-To-Risk Ratio (RRR)
A metric used by traders to compare the expected profit of a trade to its potential loss. For example, a 3:1 RRR means the potential reward is three times the amount risked, helping traders evaluate whether a trade is worth taking.
Example
“A trader enters a long position with a stop-loss 20 pips below entry and a take-profit 60 pips above, giving them a 3:1 reward-to-risk ratio on the trade.”