Animoca Brands has partnered with Soneium, Sony’s Ethereum Layer 2 blockchain, to develop Moca Network’s identity layer and launch anime initiatives on Soneium.

The S&P 500 fell 0.33% as tariffs and inflation concerns weighed on markets, with energy, tech, and communication sectors leading losses. Gold hit a record $3,059 as Trump’s tariffs fueled trade war fears, boosting safe-haven demand. The Coindesk Indices, which tracks the broader crypto market, are down by 1.01%, with Bitcoin up by 0.55% and Ether down by 0.18% in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today's top performer is CARV, up 9.2%, as it expands globally and redefines data ownership.

CARV (CARV), founded in 2022, is a modular data layer empowering users to control their data, enhancing privacy for gaming and AI systems through its CARV Protocol and ecosystem platforms. 

, advancing AI, gaming, and data ownership with its SVM Chain, which ensures privacy, scalability, and interoperability between Ethereum and Solana. With listings on Tokocrypto and Mercado Bitcoin, CARV is targeting Southeast Asia and Latin America, where users can better control and monetize their data. The $CARV token powers governance, gas fees, and incentives, fostering a user-owned data economy. Strategic partnerships with Kite AI and ARPA enhance AI intelligence, verifiable randomness, and blockchain security.

Check out the latest prices, charts, and data of 

, Sony’s Ethereum Layer 2 blockchain, to develop Moca Network’s identity layer and launch anime initiatives on Soneium. Moca Network’s AIR SDK will integrate into Soneium, enabling decentralized identity (DID) and reputation features, starting with San FranTokyo’s Anime ID. This collaboration aims to onboard anime fans to blockchain-powered experiences and enhance engagement across anime, gaming, and Web3. Sony’s Soneium, developed by Sony Block Solutions Labs and Startale Group, seeks to merge creativity and technology, while Animoca Brands’ partnership strengthens the digital identity infrastructure for an interconnected Web3 ecosystem.

Yesterday, BTC spot ETFs saw $85M in inflows, all from non-GBTC funds.

, allowing users to earn Fragments through Galxe and Zealy quests, potentially qualifying for an airdrop. Participants must complete quests, connect wallets, and use a referral code. Points update weekly, and the program may be limited in duration.

Beginner

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Animoca Brands and Sony’s Soneium partner to enhance digital identity and anime experiences in Web3

Surging gold prices and bullish equity markets are reshaping the macro landscape. Find out how you can trade the macro boom with Bybit Gold&FX.

 and ignore the cheers for all-time highs? The global financial markets are undergoing a transformative macro boom, driven by bullish stock market rallies, historic surges in gold prices and heightened volatility across asset classes. As geopolitical tensions, inflationary pressures and monetary policy shifts reshape the investment landscape, traders are being presented with unparalleled opportunities to diversify and capitalize on cross-market dynamics. 

From gold’s ascent past $3,000 per ounce to the S&P 500 and Nasdaq-100 

 reaching new highs, this interconnected environment is offering crypto traders the chance to leverage strategic fund rotation across gold, forex, stocks and cryptocurrencies. 

In this article, we’ll explore these drivers and provide actionable insights into navigating this unprecedented macroeconomic wave.

The current macro boom isn’t a random phenomenon. Rather, it’s the result of interconnected global events reshaping the financial landscape. From surging gold prices to bullish equity markets, developments are being driven by a mix of geopolitical tensions, monetary policy shifts and economic recovery efforts. Understanding these drivers is essential for traders aiming to position themselves strategically in the face of upcoming macroeconomic catalysts and heightened volatility.

Gold has reached historic highs, surpassing $3,000 per ounce for the first time in history. This unprecedented milestone is underpinned by several key factors.

These factors collectively underscore why gold remains an indispensable asset during periods of economic and geopolitical uncertainty.

Equity markets also experienced a robust rally in 2024, with indices like the S&P 500 and Nasdaq-100 posting strong gains. This bullish momentum reflects renewed optimism in global markets, despite lingering uncertainties.

While the above factors have supported equity markets so far, experts caution that volatility remains a key risk, due to potential corrections driven by geopolitical shocks and/or shifts in monetary policy.

Beneath the surface of this macro boom lies significant economic uncertainty that continues to shape market dynamics.

While these uncertainties pose challenges for policymakers and businesses alike, they also create opportunities for traders to capitalize on price movements across asset classes.For traders willing to navigate these complexities strategically, this environment offers significant opportunities for gains while underscoring the importance of diversification and risk management across markets.

Gold vs. crypto: complement or competition?

Is there a world in which both physical gold and “digital gold” can coexist and thrive? 

Gold and cryptocurrencies like Bitcoin are often pitted against each other due to their roles as alternative assets. In actuality, they serve distinct purposes in portfolios. 

With its centuries-long history, gold is widely regarded as the ultimate safe haven during economic uncertainty. Its stability and low correlation with equities make it an effective hedge against inflation, geopolitical turmoil and systemic market shocks. For example, gold prices surged by over 25% during the 2008 financial crisis and recently climbed past $3,000 per ounce amid global economic concerns in 2025.

While traditional gold remains a reliable hedge, traders who want the same stability with more flexibility can turn to 

). These assets are pegged to the price of physical gold and backed by real reserves, allowing holders to gain exposure to gold’s value while transacting on-chain. With the ability to trade 24/7, fractionalize ownership and move seamlessly across wallets and exchanges, gold-backed tokens are becoming a popular option for crypto-native investors looking to diversify without leaving the blockchain ecosystem.

On the other hand, Bitcoin emerged after the Great Financial Crisis as a decentralized digital asset designed to bypass traditional financial systems. While often dubbed 

 (due to its fixed supply of 21 million coins and potential as an inflation hedge), Bitcoin’s inherently high volatility makes it more attractive to risk-tolerant traders seeking explosive speculative growth. Despite these differences, both assets have seen increased institutional adoption, with 

 recently enabling easier access for investors.

Rather than competing directly, gold and Bitcoin can indeed complement each other within a diversified portfolio. Gold provides stability during crises, acting as a defensive asset that cushions portfolios against drawdowns. Bitcoin offers growth potential fueled by technological innovation and adoption cycles, making it suitable for traders seeking higher returns.

Interestingly, recent market trends suggest convergence between the two: Bitcoin’s resilience alongside gold during periods of volatility indicates that both may now fulfill similar roles as hedges against macroeconomic risks. However, their divergence in risk profiles underscores the importance of balancing these assets (based on individual investment goals and 

This divergence results from the contrast between gold’s predictable regulatory framework and Bitcoin’s susceptibility to liquidity shifts and regulatory changes. Together, the two assets offer unique strengths that cater to different needs in today’s interconnected financial landscape.

Before diving into the intricacies of stocks and crypto, it’s essential first to consider the landmark announcement represented by spot crypto ETFs.

The increasing correlation between the stock and crypto markets is becoming undeniable, particularly for seasoned crypto traders observing the rise of spot crypto 

 (ETFs) within traditional finance (TradFi). This regulatory milestone provides institutions with a structured avenue to gain exposure to digital assets, and signals a significant step toward mainstream acceptance of cryptocurrencies as legitimate financial instruments.

Notably, the rising popularity of Bitcoin Spot ETFs and 

 exemplifies this progress, as they effectively bridge the gap between traditional and 

 (DeFi). The substantial inflows of funds into these ETFs underscore the deepening relationship between the stock and crypto markets, offering both valuable insights and opportunities for traders who must now navigate this increasingly intertwined landscape.

What’s the link between crypto and stocks?

The correlation between stocks and cryptocurrencies has grown significantly, and is primarily driven by shared investor sentiment and overlapping market dynamics. Large-cap coins like Bitcoin often move in tandem with traditional markets during risk-on periods as traders seek high-yield opportunities across diversified asset classes. This connection is particularly pronounced in the tech sector, where Bitcoin’s performance aligns with tech-heavy indices like the Nasdaq-100, reflecting BTC’s adoption by tech-savvy investors.

Additionally, stock market events such as positive earnings reports from companies like Tesla or Amazon can bolster confidence across both equities and crypto markets as traders take on a more risk-on approach. Similarly, macroeconomic data releases, such as Federal Reserve rate decisions or unemployment figures, can also trigger volatility in stocks and crypto alike, creating lucrative opportunities for traders to capitalize on price fluctuations across the two interconnected markets.

3 reasons why rotating capital between markets is an essential cross-market strategy for crypto traders

1. Tap into global liquidity across asset classes

With the introduction of spot crypto ETFs, stock market indices trading at close to all-time highs and a renewed interest in gold as a portfolio hedge, there’s never been greater liquidity across various financial markets. As such, rotating capital between markets is a valid cross-market strategy for crypto traders seeking to maximize returns and mitigate risks in today’s interconnected financial landscape. The ability to shift one’s funds dynamically across asset classes such as cryptocurrencies, gold, forex and stock indices allows traders to capitalize on varying market conditions and economic cycles. 

2. Align with market cycles to maximize returns

From adopting an aggressive risk-on approach by positioning one’s portfolio in tech stocks and crypto, to rotating toward defensive assets like consumer defensive stocks and gold during times of volatility, the possibilities are endless for those who are well-versed with market cycles and the way they tend to affect asset prices.

For instance, during periods of heightened inflation or geopolitical uncertainty, allocating capital to gold can act as a hedge against currency devaluation, while bullish trends in equity markets provide opportunities for growth-focused investments in indices like the S&P 500 or Nasdaq-100.

3. Seize volatility-driven opportunities across markets

Similarly, forex markets offer liquidity and volatility-driven opportunities when major currencies react to macroeconomic events, such as interest rate decisions or trade policy shifts. For crypto traders, this strategy is particularly valuable, as it enables them to leverage their expertise in volatile environments while diversifying exposure to traditional assets that may exhibit lower correlation to digital currencies.

 as they offer seamless multi-asset trading capabilities, zero-fee indices trading and advanced tools for efficient fund rotation. By adopting a cross-market strategy, traders can optimize their portfolios, reduce reliance on single-market performance and enhance resilience against unpredictable economic shocks.

The Bybit Gold&FX zero-fee indices trading advantage

 offers numerous benefits to allow for frictionless trading as you’re rotating your funds across various markets. This includes the following advantages:

When coupled with MT5 integration, Bybit's zero-fee indices enable traders to efficiently move funds across diverse forex, gold and stock indices without incurring excessive trading fees. Combined with high leverage and robust liquidity, this ultimately enables rapid portfolio adjustments based on market conditions. The platform's comprehensive tools and copy trading features further streamline this process, minimizing friction and maximizing flexibility for traders seeking to capitalize on opportunities across various asset classes.

The current macro boom presents lucrative opportunities for crypto traders willing to diversify into traditional markets, such as gold and stock indices, while leveraging cutting-edge trading platforms like Bybit for seamless fund-rotation across asset classes. 

Whether investing in gold as a safe haven during economic uncertainty or capitalizing on stock market volatility fueled by earnings growth and dovish monetary policies, cross-market strategies empower crypto traders to position themselves strategically for success amidst the current unprecedented macro boom — an essential tactic for thriving in today’s interconnected financial ecosystem.

Intermediate

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Macro boom: How crypto traders can ride the gold & stock rally

Bedrock is a multi-asset liquid restaking protocol that enables users to earn yields across multiple blockchain networks while maintaining liquidity.

As the crypto market evolves, innovative staking solutions are becoming increasingly important for users seeking to maximize their digital asset potential. Bedrock (BR) has emerged as a pioneering protocol, offering next-level liquid staking across multiple cryptocurrencies.

This article explores Bedrock's unique approach to 

, its supported assets and the powerful technology that makes it possible. Whether you're an experienced crypto enthusiast or just entering the market, understanding Bedrock's capabilities can help you navigate the growing world of yield-generating opportunities.

 that enables users to earn yields across multiple blockchain networks while maintaining liquidity through noncustodial solutions backed by infrastructure provider RockX.

Bedrock was initially launched in March 2023 by RockX, a company with extensive experience in blockchain infrastructure and staking services. Founded with the vision of bridging the gap between traditional finance and 

 (DeFi), Bedrock was designed to strike a balance between security, compliance and the flexibility of DeFi.

The protocol began by supporting Ethereum 

, introducing uniETH, a non-rebasing reward-bearing token. Since then, Bedrock has expanded its capabilities to support multiple assets across different blockchain networks.

In 2024, Bedrock attracted substantial investment from leading crypto firms, including OKX Ventures, LongHash Ventures and Comma3 Ventures. Waterdrip Capital, LBank Labs and Amber Group also participated in the funding round, propelling Bedrock's expansion and development in the liquid restaking sector.

Bedrock seeks to transform the staking ecosystem by addressing critical gaps in current platforms as follows.

By addressing these four challenges, Bedrock creates a more accessible staking ecosystem in which users can earn sustainable yields across multiple assets without sacrificing security or liquidity.

Bedrock operates via a modular infrastructure that supports multiple assets and integration with various staking protocols. The system allows users to deposit their crypto assets in exchange for "uni" standard tokens (such as uniETH, uniBTC or uniIOTX), representing the staked assets and all future staking rewards.

Unlike traditional rebasing tokens that increase in quantity over time, Bedrock's tokens grow in value. As staking rewards accumulate, one uniETH becomes worth more than one ETH. Bedrock’s non-rebasing model simplifies accounting, and makes interaction with other DeFi protocols more seamless.

For Ethereum staking, Bedrock integrates with 

 to enable restaking, allowing users to earn additional rewards beyond basic staking by supporting multiple network services. With Bitcoin, Bedrock works with 

 to enable BTC holders to participate in staking for the first time — opening a new frontier for the trillion-dollar asset.

 to manage staking processes, validator operations and reward distribution. Bedrock has eliminated reliance on oracles for security, instead using on-chain data to calculate validator balances and staking rewards. This approach reduces vulnerability to external attacks and/or data manipulation.

One of Bedrock's key innovations is its support for multiple cryptocurrencies within a unified staking ecosystem. This multi-asset approach allows users to diversify their staking portfolios across various blockchain networks while simultaneously accessing enhanced yields through restaking mechanisms.

As Bedrock's liquid restaking token for Ethereum, uniETH is designed to natively restake and harness additional EigenLayer rewards. It combines institutional-grade security with enhanced yield potential from EigenLayer’s ecosystem.

When staking ETH with Bedrock, users receive uniETH tokens representing their staked ETH and future rewards. Unlike rebasing tokens, uniETH grows in value (rather than quantity) over time to improve compatibility with other DeFi protocols and simplify the user experience.

Through EigenLayer integration, uniETH holders earn base Ethereum staking rewards and additional yields from Actively Validated Services (AVS), such as EigenDA and Espresso Systems. Bedrock employs a noncustodial approach, with smart contract–controlled withdrawal credentials and an oracle-less system that relies upon on-chain data for enhanced security.

Bedrock BTC (brBTC) is designed for Bitcoin holders seeking next-generation DeFi opportunities. As Bedrock's flagship Bitcoin liquid restaking token, it serves as a gateway to BTCFI 2.0, an ecosystem of yield-generating strategies for Bitcoin.

The token accepts uniBTC and multiple Wrapped BTC (WBTC) assets, with Bedrock managing these across trusted yield sources, including Babylon, Kernel, Pell Network and SatLayer. This diversification mitigates risk while maximizing returns for Bitcoin holders.

The primary advantage of using brBTC is that of yield diversification through intelligent asset allocation. Connecting to multiple restaking protocols simultaneously delivers enhanced returns while lowering the entry barrier for Bitcoin holders seeking sophisticated DeFi strategies. 

uniBTC is a specialized restaking protocol that accepts WBTC tokens in partnership with Babylon chain. The first supported token is WBTC on Ethereum, allowing holders to earn staking yields while maintaining Ethereum network security.

Through Babylon's approach, uniBTC bridges Bitcoin's value with 

 (PoS) yield potential, addressing both Bitcoin's capital dormancy and PoS chains' need for security backing. The protocol features fully slashable security, whereby 1/3 of the Bitcoin stake is guaranteed to be slashed during safety violations.

uniBTC maintains staker security and liquidity in order to enable Bitcoin holders to withdraw funds, provided they follow protocol rules. By enabling staking without transferring ownership, uniBTC preserves Bitcoin's security principles while creating new yield opportunities previously unavailable to BTC holders.

 is Bedrock's liquid staking solution for the 

 blockchain. It’s designed to overcome several limitations of the traditional delegated PoS mechanism on IoTeX. As the first and largest liquid staking protocol on the IoTeX network, uniIOTX has established Bedrock as a key player in this ecosystem.

Like other Bedrock tokens, uniIOTX follows the non-rebasing model, meaning its value (rather than the quantity of tokens) increases over time. This approach simplifies integration with other DeFi applications, and improves the user experience.

The unilOTX token represents both the staked IOTX and all future staking rewards, thus allowing users to maintain liquidity while earning staking yields. By removing barriers to entry and exit in the IOTX staking system, uniIOTX enhances capital efficiency and accessibility for IOTX holders.

 of the Bedrock ecosystem. It’s designed to align stakeholder incentives while driving protocol growth, and supports holders in voting on proposals affecting the protocol's direction, including supported assets and fee structures.

Distribution of the BR token allocates 5.5% to early supporters during the token generation event (TGE), with the remaining portions for community 

, ecosystem growth, team members (with vesting) and liquidity incentives. Individual wallet allocations are capped at 0.4% during airdrops to prevent concentration.

BR maintains value through multiple mechanisms. Users can lock tokens for veBR to reduce circulating supply, protocol revenue funds regular buybacks, and seasonal governance resets to encourage ongoing participation. This balanced approach creates a tokenomics model that’s focused on sustainable growth and fair distribution while it controls inflation.

Looking to trade Bedrock tokens? Bybit now offers the BR/USDT Spot trading pair and BRUSDT Perpetual contract. To get started, you'll first need to create a Bybit account, then fund it with cryptocurrency and navigate to the 

While BR demonstrates strong fundamentals in the liquid staking space, investors must carefully consider its growth potential and risk factors before making investment decisions.

BR shows promising potential with its multi-asset approach and institutional-grade security features. However, potential investors should 

 before investing, particularly given the innovative nature of liquid restaking technology.

Bedrock's multi-asset liquid restaking mechanism addresses traditional staking limitations by maintaining liquidity while enhancing yields across Ethereum, Bitcoin and IoTeX. With battle-tested security and strategic partnerships, Bedrock offers a practical solution for yield-seeking crypto holders in today's evolving DeFi market.

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Bedrock (BR): Next-level liquid staking across multiple cryptos

The EUR/USD exchange rate is at a critical point, with increasing speculation that the euro may reach parity (1.00) against the US dollar by 2025.

The EUR/USD exchange rate landscape is characterized by significant economic and monetary divergence between the eurozone and the United States. It’s anticipated that the ECB will cut interest rates from 4.0% to 3.5% in response to slowing growth within the eurozone. In contrast, the US Federal Reserve is expected to maintain higher interest rates, ranging from 4.5% to 5.0%, for an extended period. This disparity creates a widening interest rate gap that diminishes the euro's appeal for investors, making the US dollar a more attractive option.

Furthermore, the economic outlook for the eurozone remains bleak, with GDP growth projected at just 0.5%, while the US economy is expected to grow at a more robust 1.8%. This stark difference in growth rates exacerbates the euro's vulnerability as international investors seek opportunities in stronger economies. The potential for the euro to reach parity with the US dollar is heightened by these macroeconomic factors, which underline the current fragility of the eurozone's economic environment.

Geopolitical and market sentiment influences

Geopolitical uncertainties are crucial in shaping the economic landscape and influencing the EUR/USD exchange rate. Ongoing conflicts — particularly the Russia-Ukraine war and tensions in the Middle East — continue to create instability that negatively impacts the eurozone. These geopolitical risks are driving investors toward the US dollar, which is perceived as a haven during times of uncertainty.

Additionally, market sentiment has shifted toward a bearish outlook for the euro. Hedge funds and institutional investors are increasingly taking short positions on the euro, betting on its decline. This negative sentiment reflects concerns about the eurozone's economic outlook, and suggests that if the current trend continues, the euro could quickly approach parity with the dollar. The interplay between geopolitical factors and market sentiment underscores the challenges facing the euro, amplifying the potential for volatility in the currency markets.

Implications for businesses and investors

The implications of a potential euro decline leading to parity with the dollar are significant for various stakeholders, including businesses, investors and policymakers. For European exporters, a weaker euro could provide a competitive edge, making their products more affordable in global markets. This could boost sales for various industries, such as luxury goods, automobiles and machinery. However, importers and businesses that rely on dollar-denominated goods will face increased costs, which could squeeze margins and lead to inflationary pressures.

For investors, the prospect of heightened volatility in the forex market presents both risks and opportunities. Strategies such as shorting the euro or using 

 for hedging against currency fluctuations may become more prevalent as market conditions evolve. Central banks, particularly the ECB, may consider interventions if the euro approaches parity with the US dollar, although the historical effectiveness of such measures has been limited without coordination with the Fed.

In summary, the potential for the euro to fall to parity with the US dollar is being driven by a combination of economic divergence, geopolitical uncertainties and shifting market sentiment. Stakeholders must remain vigilant and be ready to adapt in order to navigate this complex environment. The evolving dynamics will require businesses and investors to closely monitor central bank policies, economic indicators and global risk factors to effectively manage their exposure and capitalize on potential opportunities in the currency markets.

Advanced

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Bybit FX Insight Report: Is EUR/USD Parity Possible in 2025?

Investing

Trading

Indicators

The risk-reward ratio help defines the difference of entry points, stop loss and take profit to minimize risks. Learn how to hedge against risks & maximize your potential reward.

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A good trading strategy is often not enough to bring consistent profits from crypto trading. Profitable traders usually have certain methodologies they use to achieve their ultimate financial goals.

Most traders spend their time studying price charts, reviewing historical data and looking for the next big opportunity. While these are constructive activities that everyone needs to attend to, not every trader takes the time to focus on the potential loss or profit relative to the risk taken.

Being able to recognize a good risk-to-reward ratio can help you plan a proper 

 and determine whether you’re going to be successful in the long run and achieve your financial goals — or simply get lucky in the short term.

Whether you’re a beginner or an experienced trader, this guide will introduce you to the fundamentals of the risk/reward ratio, including its use, calculation method and risk management, in order to minimize your losses.

The risk/reward (RR) ratio defines the relationship between the potential losses and gains for any given trade. It’s determined by the difference in entry price from the stop-loss and take-profit price. In every trading strategy, the ideal approach is to obtain maximum reward against minimum risk.

Traders can identify risk by finding the price difference between the entry order and the stop-loss order. On the other hand, profit targets indicate a price level where a trader can exit the market with a considerable gain. Traders can identify the reward by measuring the distance between the entry point and the profit target.

A stop-loss trading order automatically sells your cryptocurrency once the price reaches the 

. If this occurs, the order will automatically close to prevent further loss on the trading account, should the price drop even lower.

The difference in percentage between the stop-loss and take-profit level helps to identify the RR ratio, and is an effective way to hone your trading strategy. A low RR ratio is also known as asymmetric risk reward, in which the potential gains from an investment are far greater than the possible losses — and the risk is worth taking.

Traders must calculate the risk they’re taking per trade vs. the reward they stand to gain in order to determine the risk/reward ratio. In manual trading, traders analyze and set these levels before opening a position.

Risk is the amount of money a trader may lose as determined by the stop-loss order. In other words, it’s the difference between the stop-loss order and the entry price. Similarly, the reward is the potential profit set by the trader. We can measure it by calculating the distance between the entry point and the profit target.

The risk/reward ratio is the quotient we obtain when dividing the risk by the reward. 

We can calculate it following this simple formula:

If the ratio is less than 1, you’ve taken a lower risk to get higher returns. The three possible outcomes of the calculation are as follows:

Among these three cases, the aim is to keep the risk lower than the reward so that every time the trade hits the stop loss, your loss is minimized. The ultimate goal is to keep the risk as low as possible in every trade in order to maximize potential profit.

Below is an example of a trade with a desirable risk/reward ratio:

In the above image we see the stop loss, take profit and entry point. Now, let’s plot them in the formula and identify the risk/reward ratio.

Risk/reward ratio = (44,738 − 43,676)/(47,591 − 44,738)

The risk/reward ratio here would be 1:2.68, which is less than 1.

Finding the trend in the volatile cryptocurrency market can be challenging, regardless of whether you’re using 

. The risk/reward ratio remains one of the most important tools to help critically identify a trade entry point, a stop-loss or a take-profit order. Traders usually identify price direction by using multiple technical and/or fundamental tools. However, even if you follow a good trading strategy, there’s always the possibility of loss, as no one knows the future.

Therefore, crypto’s high volatility and unpredictable market make using the risk/reward ratio compulsory for cryptocurrency trading. As such, using a stop loss in each trade is essential. Moreover, it can help you increase the probability of winning trades. It isn’t wise to risk all of your investment in a single trade, nor does it make sense to risk $1,000 for a $100 gain. Again, most analysts advise a risk/reward ratio of no greater than 1:2, or 0.5, for recommended trades.

In every trading strategy, obtaining higher returns is the primary goal. That’s why a risk/reward ratio of no greater than 1:2, i.e., with a maximum value of 0.5, is recommended. However, there are no fixed rules of use, as it depends on the expectation and the strategy you use.

Let’s have a look at the concept of trading expectancy, or the average profit for each trade placed by an investor, using the following formula:

Finding the expectancy and matching it with the risk/reward ratio is important for day traders and swing traders. For example, if you make ten trades, of which six are profitable, your win rate is 6/10 or 60%.

Now, let’s say that of those ten trades from which you’ve made a profit, you earn $6,000, while losing $2,000 on your four losing trades. In this case, your average win should be $6,000/6 = $1,000, while the four losing trades with $2,000 loss produce an average loss of $2,000/4 = $500.

Therefore, your trading expectancy of 80% is very high.

The risk-to-reward ratio plays a vital role in making trades, although a good R/R ratio still doesn’t ensure profitability. It’s a tool designed to protect against unexpected market movement that could wipe out profit potential. Besides using an appropriate R/R ratio, take other factors into consideration as well:

Overall, it’s recommended that you stick to a set of rules written into your trading checklist in order to obtain the ultimate benefit from the market.

Technical Indicators and R/R Ratio to Maximize Rewards

Clearly, you cannot rely solely on risk/reward ratio when trading. Trading or investing without properly managing position sizing and a good R/R will only maximize your risks. Financial trading requires a systematic approach to increase the potential reward, and there’s no place for guessing the price or gambling.

Here are a few steps to take in order to increase your success and reduce your risk.

Setting a Stop Loss by Defining the Risks

The risk per trade is the difference between the entry point and the stop loss level. The stop-loss level is the exit point where your trade should close automatically in order to minimize loss.

Price action, or the price movement of an asset plotted over time on a chart, defines what buyers and sellers are doing in the market. If you read a price chart carefully, you’ll see that price often respects certain 

 multiple times. If we can set the stop loss from these, the price is more likely to bounce back.

In the above image, we see that Bitcoin moves higher from the strong support of $30,000. Therefore, buying from that level with a risk below $30,000 creates a higher probability of a win.

Another approach is using trend line support or resistance, from which the price often rebounds in a timely fashion.

The above image shows the price bouncing back from the support trend line, with the candlesticks showing the price correcting from the trend line and moving higher. 

Besides static or trend line support, prices are often rejected from dynamic levels. The 

 (EMA) is a great example of dynamic support and resistance level. EMA is a type of moving average that smooths out prices by placing more weight on the most recent price action. For example, if the price approaches the 20-period EMA, there’s a high probability that the moving average will act as a dynamic support or resistance level.

In the above chart, we can see how the price moves higher from the dynamic support. In this regard, it’s safe to place the stop loss below the 20 EMA. Therefore, the price rebounds and moves higher with a risk/reward ratio of approximately 1:4. 

How to Set a Proper Target Profit to Minimize Risks

Before making a trade, it’s recommended you measure the risk and reward. In the above section, we’ve seen how to measure risk using support resistance and moving averages. The same rules apply to measuring rewards. If the price moves higher and reaches any significant resistance level, it has a higher probability of reacting at these price levels. 

Above is an example of how to set the take profit, based on resistance levels. Here, 40,000 works as a significant price reversal point, from which the price moves lower, making the level significant. Therefore, if you’ve bought BTCUSD after the rejection at 30,000, the goal for your take profit should be 40,000.

 is used to identify possible price targets. The primary approach is to consider the 161.8% (1.618) extension level as a major price target. 

How to Use the Risk/Reward (RR) Ratio for Crypto Trading

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards