What is the importance of Risk Reward Ratio in Trading? How to calculate it

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risk reward ratio is very important for a trader. the reward should always be more than the risk taken for the perticular trade to be a successful trader. as there is always a 50% chance of wining trade and the losing trade as well if a regular trader is trading with more reward than the risk (for example 1:2) he will always be in profit considering the 50% chance for winning and losing trade.

A risk-reward ratio is a ratio used by many investors to compare the expected returns of an investment to the amount of risk undertaken to capture these returns. This ratio is calculated mathematically by dividing the amount he or she stands to lose if the price moves in the unexpected direction ( the risk) by the amount of profit the trader expects to have made when the position is closed
For calculating Risk reward ratio divide your net profit (the reward) by the price of your maximum risk.

I guess other answers have nicely described the importance of risk-reward ratio in Trading. Check below link to download an Excel sheet to calculate risk-reward ratio yourself.