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What`s your opinion in Risk/ reward ratio?

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Question added by khaled kandel, MBA-CPM , A.Portfolio Manager & Trainer , NBE Equity portfolio Management
Date Posted: 2014/10/25
khaled kandel, MBA-CPM
by khaled kandel, MBA-CPM , A.Portfolio Manager & Trainer , NBE Equity portfolio Management

A ratio used by many investors to compare the expected returns of an investment to the amount of risk undertaken to capture these returns. This ratio is calculated mathematically by dividing the amount he or she stands to lose if the price moves in the unexpected direction (i.e. the risk) by the amount of profit the trader expects to have made when the position is closed (i.e. the reward).

Professional traders recommend at least1:3 risk reward ratio

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