The planned loss to planned gain of a setup; meaningful only together with outcome probabilities and costs.
Risk–reward ratio is best understood as part of a system rather than as an isolated definition. Its related coordinates show the mechanisms, incentives and historical records that give the term practical meaning.
Risk–reward ratio describes how participants value, trade or obtain exposure to bitcoin. Market behavior can affect adoption and mining economics, but it does not rewrite consensus rules. Price evidence and protocol evidence answer different questions.
Understanding Risk–reward ratio helps distinguish a verifiable Bitcoin mechanism or historical record from slogans, products and market narratives.
For the clearest picture, read this entry together with Trading expectancy, Stop-loss, Take-profit. The reverse links also lead from Take-profit, Trading expectancy.
Linked to related atlas coordinates
Grounded in a source record
Explains function and trade-offs
Part of the open Bitcoin knowledge graph