Return on Risk (ROR)
The ratio of potential profit to maximum risk, usually expressed as a percentage.
Explanation
ROR helps compare strategy efficiency on a risk-adjusted basis. A common formula is: potential profit / max loss. Higher ROR may come with lower probability of profit, so traders balance both metrics rather than optimizing only one.
Example
If max profit is $180 and max loss is $420, return on risk is about 42.9%.