FXpips Academy · Forex Foundations · free
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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.