#RiskRewardRatio The risk-reward ratio measures potential profit against possible loss in a trade, guiding investment decisions. Calculated as the difference between entry price and stop-loss (risk) divided into the difference between entry and target price (reward), a common ratio like 1:3 means risking $1 to gain $3. For Bitcoin, with high volatility, a favorable ratio balances frequent stop-outs against larger gains. Ratios help assess trade viability—higher rewards justify risks in trending markets. In tariff-driven uncertainty, where prices fluctuate, disciplined ratio analysis prevents overexposure. Always align ratios with strategy and risk tolerance for consistent, informed trading.