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Risk reward calculator

Use this free risk reward calculator to calculate your R:R ratio before entry. Add entry price, stop loss, target, and optional risk amount to see risk, reward, R multiple, and break-even win rate.

Risk to reward ratioR multipleBreak-even win rate
Calculator

Risk reward calculator

Calculate risk to reward ratio before the trade, then journal whether that planned R:R actually converts in live execution.

Use this before entry, then journal whether the setup type actually performs over time.

Want to save this calculation with the actual trade?

Use TradeDoctor AI to journal planned risk, actual risk, emotions, rule breaks, and AI Assistant feedback after execution.

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Guide

How to calculate risk to reward ratio

A risk reward calculator compares the distance from entry to stop loss against the distance from entry to target. In plain English, it answers: how much am I risking, how much could I make, and is the trade worth the downside?

To calculate risk to reward ratio, measure risk as the absolute distance between entry and stop loss. Then measure reward as the absolute distance between target and entry. Divide reward by risk to get the R:R ratio or R multiple.

Risk to reward ratio = absolute(target - entry) / absolute(entry - stop loss). A trade risking 50 points to make 150 points has a 3:1 risk reward ratio, or 3R.

What is a good risk to reward ratio?

A good risk to reward ratio depends on the strategy, market, time frame, and win rate. Many traders look for at least 2:1 because it gives room for losing trades, but a 2:1 setup is not automatically good. The target still has to be realistic and the stop loss has to reflect where the trade idea is actually invalidated.

A 1:1 risk reward ratio can work for a high win-rate system. A 3:1 or 4:1 ratio can work for a lower win-rate trend or breakout system. The best risk reward ratio is the one your journal proves over many trades, not the biggest number on a single chart.

01

Why risk to reward matters more than win rate

Win rate only tells you how often trades win. Risk to reward tells you whether the wins are large enough to pay for the losses. A trader can win 40% of trades and still be profitable if average winners are much larger than average losers.

02

Break-even win rate

The calculator shows the win rate needed to break even at the selected R:R ratio. A 1:1 trade needs about 50% before costs. A 2:1 trade needs about 33.3%. A 3:1 trade needs about 25%.

03

Risk amount and potential reward

If you enter a risk amount, the tool estimates potential profit at the chosen R multiple. This helps turn chart distance into account-level risk before the trade is placed.

04

Common risk reward mistakes

The biggest mistakes are moving the target just to make the ratio look better, using a stop that is too tight for the setup, ignoring fees and spread, and taking trades where the chart has no clean path to target.

R:R RatioBreak-even win rateWhat it means
1:150%Winners and losers need to be similar in size and frequency.
2:133.3%One winner can offset roughly two same-risk losses before costs.
3:125%Lower win rate can still work if targets are realistic and repeatable.

How to use this risk reward calculator

Enter your planned entry price, stop loss price, and target price. The risk reward calculator will show risk per unit, reward per unit, the R multiple, and the break-even win rate. If you add a risk amount, it will also estimate potential profit at that R multiple.

Use the number as a planning check, not a permission slip. A trade with a clean 3:1 risk reward ratio can still be poor if the target is unrealistic, the stop is inside normal noise, or the setup is outside your rules.

Risk reward ratio for forex, metals, indices, crypto and CFDs

The same risk to reward idea works across forex, metals, indices, crypto and CFD markets. Forex traders often compare pips from entry to stop and entry to target. For metals, indices, crypto and CFDs, always verify the broker contract size, spread, commission and account currency before turning R:R into dollars.

Use risk reward with your trading journal

The calculator shows what you planned. Your journal shows what happened. Track planned R:R, actual exit, setup type, emotional state, and rule breaks so you can learn which risk reward profiles actually work for your strategy.

Use it with TradeDoctor

The calculator gives the plan. Your journal proves the behavior.

After calculating the setup, log the trade in TradeDoctor AI to see whether actual risk, rules, emotions and outcomes matched the plan.

Plan day rules with Text Journal before the session.
Capture trades with Snap Journal, import, or fast manual entry.
Use AI Assistant to summarize journal patterns that calculators cannot capture.
Planned risk1.0%
Actual risktracked
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FAQ

Risk reward calculator FAQ.

Quick answers for traders comparing risk, reward, R multiple, and break-even win rate before taking a setup.

What is a risk reward calculator?
A risk reward calculator measures the potential reward of a trade against the amount at risk. It uses entry, stop loss, and target to calculate R:R ratio, R multiple, and break-even win rate.
How do I calculate risk to reward ratio?
Subtract stop loss from entry to find risk, subtract entry from target to find reward, then divide reward by risk. For short trades, use absolute price distance so the calculation stays positive.
What is a good risk to reward ratio?
There is no universal best ratio. Many traders prefer 2:1 or better, but a lower ratio can work with a high win rate and a higher ratio can fail if targets are unrealistic.
Why does risk reward matter more than win rate?
Win rate shows how often you win. Risk reward shows whether winners are large enough to cover losers. A strategy can be profitable with a modest win rate if average winners are meaningfully larger than average losses.
Is this calculator financial advice?
No. It is an educational planning tool. You are responsible for checking inputs, broker costs, execution risk, and whether the trade fits your own rules.

Calculate the plan. Then journal the result.

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