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    The risk/reward ratio is very important concept that determine the success of a trader.

    As a short term trader , we have been taught to set a target entry, exit price and stop loss if the trade goes against us after doing homework on the fundamental and technical indicators in the chart and it is beyond reasonable doubt that we are convinced of the entry. But have we wonder the other side of the trade if the reward justify the amount of risk we are willingly to undertake? of course, all of the traders in the world would love to have the

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    er doing homework on the fundamental and technical indicators in the chart and it is beyond reasonable doubt that we are convinced of the entry. But have we wonder the other side of the trade if the reward justify the amount of risk we are willingly to undertake? of course, all of the traders in the world would love to have th
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    mount of risk we are willingly to undertake? of course, all of the traders in the world would love to have their reward to the most and the risk to be the least. The question next is then what is the reasonable reward/risk ratio? A good rule of thumb is to attain a return of three times as much as the amount risked, making the reward/risk ratio 3 to 1, or maybe anywhere between 2 to 1 and 4 to 1.

    To attain consistency and profitable trades in the long run ,your rewards must be bigger than your risks over time so that you can make money.

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