Risk Management Flashcards by Michael Agwu

Q

what is a stop loss order?

A

limits losses if the trade goes against you

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Q

what is a take-profit order?

A

automatically closes the trade when it hits a profit target

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Q

what’s the ideal r/r ratio? (risk/reward ratio)

A

3:1

take profit order at 3%

stop loss order at 1%

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