What does risk-to-reward mean?

In short

Risk-to-reward compares the amount you could lose with the amount you are trying to make.

If a trade risks $10 to pursue a possible $20 gain, its planned risk-to-reward is 1:2. This describes the plan, not the result. Slippage, fees, funding, and early exits can change the actual numbers.

A higher ratio does not make a trade better if the target is unrealistic or the entry is poor. A smaller target can be reasonable when the probability and market conditions support it.

Think about the whole process: win rate, average win, average loss, costs, and whether you can follow the plan repeatedly. One attractive ratio is not an edge by itself.