When evaluating potential risks and returns, it's crucial to remember that higher potential returns typically come with higher risk. However, the key rule is to ensure that the potential reward justifies the risk you're taking. This means consistently aiming for a risk/reward ratio that aligns with your trading strategy, often aiming for a minimum ratio of 1:2 or higher, depending on market conditions. Balancing the potential for returns with the possibility of loss is essential for sustainable trading.