Free calculator
Risk Reward Calculator
Put in your entry, your stop and your target. See how the possible win compares with the possible loss.
- Forex
- Gold
- Indices
- Stocks
- Crypto
Works on any price, so you can use it for forex, gold, indices, stocks or crypto.
Risk $0.00500 points to make $0.01500 points.
With this R:R you need to win 25.0% of trades to break even. Anything above that is profit. A 1:2 setup only needs a 33.3% win rate. A 1:3 setup only needs 25%. This is why letting winners run matters more than picking direction.
For learning and planning. The numbers are math on what you type, not a prediction.
Open TradingView chartsAffiliate link. Charting software, not a signal.
What is risk to reward?
Risk to reward compares the distance to your stop with the distance to your target. A 1 to 2 trade aims to make twice what it risks.
It also tells you the break even win rate: how often a setup like this would need to work just to not lose money over many trades, before costs.
The formula in plain words
- Risk = distance from entry to stop. Reward = distance from entry to target.
- Ratio = reward divided by risk.
- Break even win rate = 1 divided by (1 plus the ratio).
R = |Target − Entry| ÷ |Entry − Stop| Break even win rate = 1 ÷ (1 + R)
Worked example
A buy at 1.0950 with a stop at 1.0920 and a target at 1.1010
- 1Risk: 1.0950 minus 1.0920 = 30 pips.
- 2Reward: 1.1010 minus 1.0950 = 60 pips.
- 3Ratio: 60 ÷ 30 = 2, so the trade is 1 to 2.
- 4Break even win rate: 1 ÷ (1 + 2) = 0.333, about 33%.
This setup risks 30 pips to aim for 60. It would need to work about 1 time in 3 just to break even before costs.
Common mistakes
- Moving the target farther away to make the ratio look better. A target price is unlikely to reach does not help.
- Ignoring costs. Spread and commission push the real break even win rate higher.
- Treating the ratio as a forecast. It is a plan, not a promise about what price will do.
Questions people ask
What is a good risk to reward ratio?
There is no magic number. A higher ratio needs fewer wins to break even, but targets far away are hit less often. The ratio and the win rate have to be judged together.
What is an R-multiple?
R is the amount you risked. A win of twice your risk is +2R. A full loss is -1R. It lets you compare trades of different sizes.
Does a 1 to 3 ratio mean I will make money?
No. It only says how big the win is compared with the loss if each happens. Whether the setup works often enough is a separate question.
Learn the idea behind it
The calculator does the math. These free lessons explain when and why to use it.
Need a broker to practice?Start with a Genesis demo accountPaid partner link
Demo first. Trading has risk of loss. Education, not financial advice.