Understanding Risk-Reward in Practice

Hey everyone, wanted to quickly touch on risk-reward, which I'm realizing is crucial. It's basically the ratio of how much you stand to lose versus how much you expect to gain on a trade. Say you're looking at $NFLX around 73.37, and you set a stop loss at 72.50 and a take profit at 75.00. Your risk is the 0.87 (73.37-72.50) you could lose, and your reward is 1.63 (75.00-73.37) you could gain. That's a 1:1.87 risk-reward ratio, which means you stand to gain almost twice what you risk. Thinking in these terms makes trade selection much clearer for me, ensuring I'm not just chasing entries without a clear exit strategy.