Risk / Reward Calculator
The risk-reward ratio tells you whether a trade is worth taking before you enter. Enter your planned entry, stop, and target to grade the setup.
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Risk / Reward Ratio
1 : 3.00
Risk per Share
$5.00
Reward per Share
$15.00
Breakeven Win Rate
25.0%
win rate needed to break even
What this means: This setup risks $5.00 to make $15.00 — a 3.00R trade. You only need to win 25% of the time to break even.
R-multiple
R = (Target − Entry) / (Entry − Stop)Reward distance divided by risk distance. A 3R trade makes three times what it risks. Breakeven win rate = 1 / (1 + R).
How It Works
- 1Risk is the distance from entry to your stop; reward is the distance to your target.
- 2Expressing trades in R lets you compare setups of any size or price.
- 3Higher R-multiples tolerate lower win rates — a 33% win rate is profitable at 2R+.
Frequently Asked Questions
What is a good risk-reward ratio?
Most traders demand at least 1:2. At 1:2 you can be wrong 66% of the time and still break even.
What does "2R" mean?
A profit equal to twice your initial risk. If you risked $500 and made $1,000, that’s a 2R win.
Should I ever take a trade below 1:1?
Only with a demonstrably high win rate (e.g., certain mean-reversion systems). For most traders it’s a losing proposition.
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Disclaimer: These calculators are for informational and educational purposes only and do not constitute financial, tax, or investment advice. Results are estimates based on your inputs. Consult a qualified professional before making financial decisions.