Risk/Reward Calculator
See your R:R ratio, breakeven win rate, and expected value before you enter a trade. Updates in real time.
What Is Risk/Reward Ratio?
Risk/reward ratio compares the potential loss on a trade (from entry to stop-loss) with the potential gain (from entry to take-profit). It answers the question: "Is this trade worth taking?"
A 1:2 ratio means your potential reward is twice your potential risk. With a 1:2 R:R, you only need to win 33.3% of your trades to break even, which gives you significant room for losing trades while still being profitable.
Why R:R Matters More Than Win Rate
A 70% win rate with 1:0.5 R:R means you win $50 seven times ($350) and lose $100 three times ($300). Barely profitable. One bad trade wipes the edge.
A 35% win rate with 1:3 R:R means you win $300 three and a half times ($1,050) and lose $100 six and a half times ($650). Solidly profitable despite mostly losing.
Higher R:R gives you more room to be wrong. A 1:3 trade lets you lose twice as often as you win and still come out ahead.
Expected Value = (Win Rate x Reward) - (Loss Rate x Risk). Positive EV means your strategy makes money over time. This calculator shows your EV for every setup.
Common Questions
What is a good risk/reward ratio?
Most professional traders target a minimum of 1:1.5 to 1:3. Anything below 1:1 means you need to win more than half your trades just to break even. The "best" ratio depends on your strategy and win rate. Use the expected value calculation to check if your specific combination is profitable.
Should I always aim for high R:R?
Not necessarily. Higher R:R often means a farther take-profit, which reduces your win rate. A 1:5 trade might only win 15% of the time. The goal is finding the R:R and win rate combination that gives you positive expected value. Use the win rate slider in this calculator to test different scenarios.
How does R:R relate to position sizing?
R:R tells you whether a trade is worth taking. Position sizing tells you how much to risk on it. Use our Position Size Calculator to determine the correct lot size once you know your stop-loss distance.
What is expected value in trading?
Expected value (EV) measures how much you expect to make or lose per trade on average. Positive EV means your strategy is profitable over time. EV = (Win Rate x Average Win) - (Loss Rate x Average Loss). This calculator shows your EV in terms of R (risk units).
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