Understanding Risk-Reward in Crypto Trades

Hey everyone, wanted to quickly touch on risk-reward, which is foundational but often overlooked, especially in fast-moving markets like crypto. It's basically comparing how much you stand to lose if a trade goes wrong versus how much you expect to gain if it goes right. For example, if you're looking at $WETH around 1.07 and decide you'll cut your losses if it drops below 1.00 (a 0.07 risk), but your target is 1.28 (a 0.21 reward), your risk-reward is 1:3. That's a good setup.

Always try to target trades with at least a 1:2 or 1:3 risk-reward. This doesn't guarantee wins, but it means you can be right less than half the time and still come out ahead. It helps manage your capital and keeps you from chasing every pump. Even with a high conviction, if the risk-reward isn't there, sometimes it's best to wait for a better entry.