Risk-Reward Ratio
Potential loss vs potential gain per trade. A $0.30 YES share risks 0.30 to gain 0.70 — roughly 1:2.3 ratio.
In Depth
Risk-Reward Ratio is a fundamental concept in prediction market trading. In platforms like Polymarket with thousands of active markets, understanding risk-reward ratio is essential for consistent profitability. TradeSphere data across 5,400+ markets shows that traders who master these concepts significantly outperform those trading on instinct.
In practice, risk-reward ratio connects to Position Sizing, Edge, Implied Probability. PolyPulse tracks these metrics and publishes weekly analysis. For hands-on application, PolyFire provides real-time market data and copy trading via Telegram.
Related Terms
3Position Sizing
tradingDetermining how much capital to allocate per trade. Prevents any single loss from crippling your bankroll.
Edge
analysisDifference between market price and estimated true probability. Positive edge means mispricing in your favor.
Implied Probability
analysisProbability implied by market price. A $0.65 YES share implies 65% probability. Compare to your estimate to find edge.
See It in Action
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