# Risk/Reward Ratio

A ratio of desired profit to accepted amount of loss usually implemented as stop loss and target order. For example trader might want to risk $100 in hope to make $300 with risk/reward ratio of 1:3.

## Example of trades with risk/reward of 1:3

In example below trader risks $1 buying 100 shares or $100 targeting profit of $3 or $300.

Symbol | Quantity | Stop | Entry | Target |
---|---|---|---|---|

AAPL | 100 | $96.34 or -$1 | $97.34 | $100.34 or +$3 |

AAPL | 100 | $98.45 or -$1 | $99.45 | $102.45 or +$3 |

FB | 200 | $111.71 or -$0.5 | $112.21 | $113.71 or +$1.5 |