FXpips Academy · Forex Foundations · free
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MODULE 4 · LESSON 3 OF 3

Risk to reward

Risk-to-reward compares what you stand to lose with what you aim to gain. At 1:2, you risk $100 to make $200.

At 1:2 you can be right only 40% of the time and still come out ahead, because winners are twice the size of losers. Good risk management means accepting losses as a normal cost of doing business.