The possibility of making profit is inextricably interwoven with the risk of losses. Initiation of transactions with non-deliverable OTC financial instruments has a high degree of risk and can lead to losses up to the whole loss of deposited margin. Risks warning

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Search for the optimal «risk-profit» ratio

Example of using the «profit-risk» ratio

Let’s say you decide to open a purchase on ABC shares, which are currently worth $20 apiece. You buy 100 shares, which is equivalent to the position size of $ 2,000. The order to fix the price of the underlying asset, you put the take profit at $30, and the stop loss at $15 per share. In other words, you are willing to risk five dollars per share in the hope of earning $10 per share after closing your position. This is the 2:1 ratio. If your potential earnings were $15 per share, you could talk about a 3:1 ratio and so on.

At the same time, it is important to remember that a good profit-risk ratio does not give you any additional probability of success of the transaction, rather it is a technical point of over-the-counter investment.

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