Risk-reward
How much you could lose on a trade compared with how much you hope to gain.
Risk-reward compares what you stand to lose if a trade fails with what you hope to gain if it works. You measure the risk from your entry to your stop-loss, and the reward from your entry to your target.
It is usually written as a ratio. A 1:2 risk-reward means you risk $1 for every $2 you hope to make. A favorable ratio means you do not need to be right every time for your plan to make sense over many trades.
A good ratio does not make a trade good by itself. The target still has to be realistic for that chart. Risk-reward is a filter that helps you skip trades that are not worth taking.
Example: you buy at $20 with a stop at $19 and a target at $23. You risk $1 to aim for $3, a risk-reward of 1:3.
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Educational definition. Not financial advice; no real-money execution.