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Traders Glossary

Risk/Reward Ratio

The ratio between the potential loss (from entry to stop) and the potential gain (from entry to target) of a trade. Higher ratios compensate

WellingtonCDFS Editorial August 3, 2026 1 min read

Risk/Reward Ratio

The ratio between the potential loss (from entry to stop) and the potential gain (from entry to target) of a trade. Higher ratios compensate for lower win rates.

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