Understanding Risk-Reward in Crypto Trades

When we talk about risk-reward, it's essentially the ratio of how much you're willing to lose versus how much you stand to gain on a trade. For instance, if you're looking at $ADA at 0.1642 and set a stop loss at 0.1600 (risk of 0.0042) and a target at 0.1760 (reward of 0.0118), your risk-reward ratio is roughly 1:2.8. A good rule of thumb is to aim for a ratio of at least 1:2 or higher, meaning for every dollar you risk, you're targeting at least two dollars in profit.