Every investment involves a possible gain and a possible loss. The risk/reward ratio compares how much you could lose to how ...

In forex trading, understanding how to manage risk is just as crucial as identifying potential profit opportunities. One of the key tools used by successful traders to balance risk and reward is the ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

The Sharpe Ratio is a mathematical formula which measures the performance of an asset or a group of assets relative to their assumed risk. Formulaically, the Sharpe Ratio is the expected returns of an ...

The risk/reward ratio or risk/return ratio is a commonly used metric in trading that compares the potential profit of a trade with the potential loss. That said, it’s the reward traders stand to make ...