High Reward, Low Risk
You will always have a limited amount of money to invest in a trade. As you determine which trades to take, you’ll want to think about the amount of risk you are taking in comparison with the reward.
In this simulation, try to maximize your profit from trades using different combinations of reward-to-risk ratios. In addition, examine the probability and the potential profit margin. Choose your trades and see how you did. Play at least 3 times and see which trades provided the best outcome in terms of profit margin.
Choose Trades
Calculate Reward-to-Risk Ratios
Based on chart information provided, calculate the reward-to-risk ratio and whether or not it would be wise to take the trade.
Activity 1
Activity 2
Visualize Reward-to-Risk Ratios
Set entry, target and stop lines that match the reward-to-risk ratios provided.
1. Create a 5:1 reward to risk ratio.
2. Create a 8:1 reward to risk ratio.
3. Create a 2:1 reward to risk ratio.