Understanding Risk-Reward in Commodity Futures

Hey everyone, wanted to quickly touch on risk-reward, especially relevant in volatile markets like commodities. It's essentially the ratio of how much you stand to lose if the trade goes against you, versus how much you stand to gain if it goes your way. For example, if you're looking at a copper future, setting your stop-loss for a potential $100 loss but your profit target for a potential $300 gain, that's a 1:3 risk-reward ratio, generally considered favorable. This framework helps in disciplined trading and avoiding trades where the potential loss far outweighs the potential profit, regardless of how good the setup might seem.