The risk/reward ratio compares the potential loss of a trade to the potential gain. A 2:1 ratio means you are targeting $2 in profit for every $1 at risk.
Risk/reward matters over many trades. If your strategy has a 40% win rate but a 3:1 risk/reward, you make money: 40% of trades return 3x, 60% of trades lose 1x. Net expectancy is positive.
A 1:1 risk/reward means you need to win more than 50% of the time to profit. A 2:1 means you only need to win more than 33%. Improving your risk/reward reduces the win rate you need.
Before entering a trade, ask: where is my stop (risk), where is my target (reward)? If the answer is a 2:1 or better ratio, the trade is worth considering from a math perspective.
Most beginner traders enter trades without a defined target and exit too early when they see profit. Pre-defining your target and stop before entering helps remove emotional decision-making.