⚠️ Your trade might be good… but a bad risk ratio is enough to ruin the outcome.
Learn Trading with Derar-Hadri | Common mistake: Failure to calculate the risk-to-reward ratio
Many traders fall into this mistake because they focus only on the entry point, without asking: How much will I lose if the trade fails? And how much am I targeting if it succeeds?
In day trading, this mistake appears when the trader enters a trade where the stop-loss is far away while the target is close, or when they chase a strong price move influenced by volume or whales without calculating the relationship between risk and reward.
Why is this mistake dangerous?
Because it can make you need a very high win rate just to compensate for your losses. Over time, it puts pressure on your capital, increases stress, and weakens decision quality.
📊 Educational example only:
A trader enters a trade on BTC and accepts a potential loss of 30 USDT, while his target does not exceed 15 USDT.
Here he risks double what he is targeting.
Even if you succeed in several trades, one loss can wipe out a large portion of the previous results.
✅ How do you avoid the mistake of not calculating the risk-to-reward ratio?
• Set a stop-loss before entering.
• Set the target clearly.
• Compare the potential loss with the potential gain.
• Avoid trades where the risk is much greater than the reward.
• Don’t change the numbers under fear or greed.
🎯 The golden rule:
Don’t enter the trade until you clearly know how much you risk compared to what you’re targeting.
Have you ever entered a trade and then discovered that the potential return doesn’t justify the risk?
This content is for educational purposes only and not financial advice.
