Risk Management
The risk-reward ratio (R:R) compares what a trade can lose if the stop-loss is hit with what it can earn if the take-profit is reached; a 1:2 ratio means the target is twice as far from entry as the stop.
Risk-reward and hit rate only make sense together. A strategy with a 1:2 ratio breaks even at a 34% win rate; one with a 1:0.5 ratio needs to win more than 67% of trades just to cover its losses, before fees. Many signal channels advertise very high win rates that come from wide stops and tight targets; the ratio tells you whether that record can survive a single normal losing streak. It also decides how a multi-target signal should be weighted: putting most size on the nearest target lowers the effective reward.
AlgoVesta reads the entry, stop-loss and take-profit levels from each signal, so the ratio of every executed trade is known before the order is placed and is visible in the trade log afterwards. You can require a stop-loss for execution, set a fallback stop or target in pips or percent when the channel omits one, and choose how size is split across TP1, TP2 and TP3. Because both levels are placed on the venue as resting orders, the ratio you accepted is the ratio you actually trade, not one that drifts because an exit was taken by hand. Results are shown with the exact fill prices reported by the exchange or terminal. Settings live in the bot wizard on the crypto automation and Forex on MetaTrader pages.
Signal: "ETHUSDT LONG 3,000, SL 2,940, TP 3,120". Risk is 60 points, reward 120 points, so the ratio is 1:2. Over 100 such trades with a 45% win rate, the expected result is 45 wins of 120 minus 55 losses of 60, or 5,400 minus 3,300 = 2,100 points before fees. The same channel with a 1:1 ratio would need a win rate above 50% to be profitable at all.