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Risk Reward Indicator
The Risk Reward Indicator for MT5 enables traders to determine the level of exposure to risk and its reward.
The key to becoming a successful, profitable trader is in risk management. The best way to manage trading risk in forex is applying the Risk to Reward Ratio (RRR).
As important as this risk management is, many traders have difficulty in calculating it. This difficulty is eliminated using the Risk Reward Indicator (RR).
The Foundation of the Risk Reward Indicator
The Risk Reward Indicator enables traders to determine the level of exposure to risk and its reward. This indicator is displayed on the main chart as a ratio as seen in the diagram below:
From the EUR/USD H1 chart above, the RRR as displayed by the indicator is 1:3.76. The first number (1) is the risk, while the second number (3.76) is the reward.
In addition to this, the indicator displays three horizontal lines. The first line is the take-profit price level (green horizontal line). The second line is the stop loss price level (red horizontal line). Finally, the third line displayed on the chart (blue horizontal line) is the entry price.
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