Risk-to-Reward Ratio: The Math of Profit
You don't need to win every time. You just need to win BIG and lose SMALL.
The 1:2 Rule
For every ₹1 you risk, aim to make ₹2.
| Accuracy | R:R Ratio | Result (10 Trades) |
|---|---|---|
| 40% (4 Wins) | 1:2 | PROFITABLE |
| 90% (9 Wins) | 1:0.1 | LOSS (One big loss wipes all) |
AlgoStraddle Insight: Do not take a trade if the target is less than 1.5x the stop loss. Be patient.
*Disclaimer: NSE/BSE frequently revise Lot Sizes and Expiry Days (e.g., SEBI Circulars 2024/2025). Always check the latest circular on nseindia.com before trading.
Standard Disclosure: Investment in securities market are subject to market risks. Read all the related documents carefully before investing. The content provided here is for educational purposes only and does not constitute financial or investment advice. AlgoStraddle Academy is not a SEBI registered investment advisor. Trading options involves high risk and capital can be lost.