The Funded trader

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Are You A Profitable Trader

The risk-reward ratio is a fundamental concept in trading.

In simple terms, the risk-reward ratio is the difference between the amount of money you are prepared to lose and the amount of money you are aiming to make.

Typically, it is the ratio of the difference between your entry price and your stop loss vs. your entry price and your target profit.

In forex trading, you may define the risk-reward ratio in terms of pips rather than $. However, the logic remains exactly the same.

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