Definition
1R is how much you risk on a trade: the distance between entry and stop multiplied by the size. If you risk €100 and make €250, the result is +2.5R; if you hit the stop it's −1R.
Why it's useful
In money a result depends on capital; in R it measures the quality of the decision. You can compare a month with €1,000 of capital and one with €50,000, or two different accounts.
Expectancy in R tells you how much you make on average per unit of risk: if it's positive and you stick to it over time, the method works.
Minimum R:R
With a 1:2 risk/reward ratio you only need to win more than one trade in three to make money; with 1:3, more than one in four.