Terminology that indicates the prospective or anticipated Reward a trader can earn for every dollar they Risk.
Explanation: For every $x that I risk, I have received $y at the closure of the trade.
If a trader states that they have a Risk: Reward ratio of 1:3, that indicators for every $1 they risk on a trade, they receive $3 in return.
Risk: Reward is an important part of effective Risk Management that a trader employs to ensure they stay profitable.
The higher the traders' R: R, the better.