Source: https://mochatrade.com/learn/glossary/risk-reward-ratio

# Risk-reward ratio
URL: https://mochatrade.com/learn/glossary/risk-reward-ratio
Last modified: 2026-10-17

The risk-reward ratio compares what you lose if the stop is hit with what you gain at target: risking ₹1,000 to make ₹3,000 is 1:3. Alone it means nothing; with a win rate it becomes [expectancy](https://mochatrade.com/learn). [The Druckenmiller framework](https://mochatrade.com/blog/stanley-druckenmiller-built-a-framework) is the concentrated version.

## Related terms

- Expectancy: https://mochatrade.com/learn/glossary/expectancy
- Kelly criterion: https://mochatrade.com/learn/glossary/kelly-criterion
- Call option: https://mochatrade.com/learn/glossary/call-option
- Leverage ratio: https://mochatrade.com/learn/glossary/leverage-ratio
- Negative balance protection: https://mochatrade.com/learn/glossary/negative-balance-protection
- Price-to-sales ratio: https://mochatrade.com/learn/glossary/price-to-sales-ratio

Educational content only. Not investment advice. Leveraged products magnify losses as well as gains.