Risk/reward calculator
The risk/reward ratio compares what you could gain on a trade with what you could lose. Together with your win rate it decides whether a strategy can make money over many trades.
- Risk per unit
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- Reward per unit
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- Reward : risk
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- Break-even win rate
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- Expectancy per trade (in R)
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How it works
Risk = distance from entry to stop-loss. Reward = distance from entry to take-profit. Ratio = reward ÷ risk. Break-even win rate = 1 ÷ (1 + ratio). Expectancy (in R) = win rate × ratio − (1 − win rate).
Worked example
Entry 100, stop-loss 98, take-profit 106. Risk = 2, reward = 6, ratio 1 : 3, break-even win rate = 25%. At a 40% win rate, expectancy = 0.4 × 3 − 0.6 = +0.6 R: on average you gain 0.6 times the amount you risk per trade.
Things to watch
- A high ratio alone is not an edge; the win rate matters too.
- Costs and spread shrink the real ratio.
- Expectancy only means something over many trades, and a past win rate does not guarantee a future one.
This tool is for education and planning. It is not investment advice, and it cannot account for spreads, fees, slippage or your broker’s rules.