Quote from: andreibi on July 19, 2020, 03:20:34 PM

Risk to reward ratio strategy:
Buy some Bitcoin for $1000 with a profit target of $1200 and set a stop-loss at $900, the risk-reward ratio is 1:2 (or 2R in trading parlance, $200 divided by $100) because you're risking $100 to make $200.

That’s something that google already says. Would have been better for the newbies if you could explain it in your own word but never mind let me do it for you. Basically, risk reward ratio which is also referred to as RR ration is the prospective reward that an investor can receive for every dollar, he/she risks on the investment. Its basically the risk that someone would have to take to earn a certain amount of profit.

This helps the trader to plan the strategy and play safe while having higher possibility of earning profit and avoiding loss. The rest can be understood from the example you provided.