TRADING GLOSSARY
Risk–reward ratio
The risk–reward ratio compares how much a trade could lose (to the stop loss) with how much it aims to make (to the take profit).
EXAMPLE
A 20-pip stop loss and a 60-pip take profit give a risk–reward ratio of 1:3.
Try it yourself:Profit calculator →
RELATED TERMS
Full glossary A–Z →Put the theory into practice.
Open an account in minutes, or practise on a free demo first.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure