Risk-Reward Calculator

Risk-reward ratio (R:R) compares your potential loss (risk) to your potential profit (reward) on a trade. A 1:2 ratio means you risk $1 to potentially make $2. Our risk-reward calculator helps you determine this ratio based on your entry, stop loss, and take profit levels.

Risk-reward ratio is calculated using the formula: R:R = (Take Profit - Entry) / (Entry - Stop Loss). For example, if entry is 1.1000, stop loss is 1.0950 (50 pips risk), and take profit is 1.1100 (100 pips reward), R:R = 100/50 = 1:2. Our calculator does this automatically.

A minimum of 1:1.5 to 1:2 is generally recommended by professional traders. This means your potential profit is at least 1.5 to 2 times your potential loss. Higher ratios (1:3+) are even better but may be harder to achieve consistently.

Yes, but you need a win rate above 50% to be profitable with 1:1 R:R. With a 55% win rate, you'll have a positive edge. Many scalpers successfully use 1:1 R:R with high win rate strategies. Use our risk-reward calculator to find your optimal ratio.

R:R determines how much you make when you win vs. lose. A trader with 40% win rate and 1:3 R:R will be more profitable than a trader with 60% win rate and 1:1 R:R. The math: (40% × 3) - (60% × 1) = 0.6 profit per trade vs. (60% × 1) - (40% × 1) = 0.2 profit per trade.

Required win rate = 1 / (1 + R:R Ratio). For 1:2 R:R, you need 33.33% wins to break even. For 1:3 R:R, only 25% wins are needed. Our risk-reward calculator shows the required win rate for any ratio you choose.

Not necessarily. Extremely high R:R targets (1:10+) often have very low probability of being hit. The key is finding a balance between a reasonable R:R and realistic probability. A 1:2 or 1:3 with good probability is usually better than a 1:10 that rarely gets hit.

Expected Value = (Win Rate × Reward) - (Loss Rate × Risk). For example, with 50% win rate, 1:2 R:R, risking $100: EV = (0.50 × $200) - (0.50 × $100) = $100 - $50 = $50 average profit per trade. Our calculator helps you find positive expectancy setups.

Improve R:R by: 1) Using tighter stop losses based on structure, 2) Setting take profits at key resistance/support levels, 3) Letting winners run with trailing stops, 4) Only taking trades that meet your minimum R:R requirements. Use our risk-reward calculator before every trade.

Yes! Our risk-reward calculator works for forex, stocks, crypto, commodities, and any tradable instrument. Simply enter your entry price, stop loss, and take profit levels to calculate your R:R ratio and required win rate for profitability.