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R (Risk Unit)

Volume Profile Analysis glossary · Volume Profile Technicals

Definition

The monetary amount risked on a trade. A 2R winner is a trade that gained twice the initial risk.

R (Risk Unit) in plain English

"R" is just a nickname for however much money you decided you could lose on a trade before you got in. If you buy a stock and plan to bail out if it drops $50, then your R is $50 — that's your one "unit" of risk. Traders talk in R instead of dollars because it lets everyone compare results fairly: a "2R winner" means you made twice what you were willing to lose, whether that R was $50 or $500. Think of R like the ante in a card game — you measure every win or loss as multiples of that one chip you put at stake.

Also called: Risk Unit

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