Trading Concept
Risk-Reward Ratio
The ratio of potential loss to potential gain on a trade — a 1:3 ratio risks $1 to make $3.
Risk-reward ratio is the trade-level version of the question: is this worth it? A trade risking $100 to make $50 (2:1 risk-reward) needs to win more than 67% of the time to be profitable. A trade risking $100 to make $300 (1:3 risk-reward) only needs to win 25% of the time.
The ratio is set by the entry price, the stop-loss, and the target. Move the stop closer to entry and the ratio improves but the win rate drops (more stopped out). Move it further and the win rate improves but the loss per losing trade increases.
botwir3 does not configure risk-reward ratios directly. The strategy module proposes entries, and the gate validates the size against the configured band. The user designs the strategy logic — entry signals, exit conditions, position duration — and the effective risk-reward ratio emerges from those choices. The ledger records outcomes, making the actual ratio measurable after the fact.