BrokerRatingWhat is Risk/reward ratio?
Risk/reward ratio: A comparison of a trade's expected profit with its possible loss; 1:2 means risking one dollar to make two.
More terms
- Market order
- An order to buy or sell immediately at the best price available when it is sent.
- Negative balance protection
- A broker's guarantee that you cannot lose more than your account balance: if a sharp move pushes it below zero, the broker resets it to zero...
- Pip
- The smallest usual price change of a currency pair: 0.0001 for most pairs and 0.01 for pairs quoted in Japanese yen.
- Segregated client funds
- Keeping client money in bank accounts separate from the broker's own funds so it cannot be used for its business or debts; required by stron...
- Slippage
- The difference between the price you asked for and the price your trade actually filled at, usually during news or thin liquidity.
- Spread
- The difference between the buy (ask) and sell (bid) price of an instrument; the main cost of a trade on most trading accounts.