Glossary/ Risk
Risk
Reward to risk
Average win divided by average loss. With a 2:1 ratio, a 40% hit rate is profitable.
Where this comes up
Lessons that use the term in context, which is usually more useful than the definition on its own.
- Expectancy over a hundred trades — Hit rate and reward-to-risk, turned into one number.
Nearby terms
Leverage · Position sizing · Risk of ruin · Slippage · Stop loss · Average down