Risk / Reward
Risk / reward
Risk/reward and expectancy
Judge a setup before you take it. Enter entry, stop and target to see the R multiple, the win rate you'd need to break even, and whether your strategy has a positive edge.
Inputs
The setup
Results
Is the setup worth it?
Risk / reward1 : 3
R multiple3R
Risk per unit$5
Reward per unit$15
Break-even win rateWin more often than this to be profitable25%
ExpectancyAverage result per trade at your win rate+0.8R
How it works
The maths
A ratio on its own says nothing. Pair it with an honest win rate and the expectancy figure tells you whether repeating this setup a hundred times makes money.
R = |target − entry| ÷ |entry − stop| break-even = 1 ÷ (1 + R) expectancy = winRate × R − (1 − winRate) × 1
- Expectancy is expressed in R, so it scales with any position size.
- Fees and slippage reduce real expectancy — subtract them from reward.
- Use the position size calculator to convert R into units.
FAQ
Risk/reward — frequently asked questions
There is no universal number — a 1:1 setup is fine if you win often, and a 1:5 setup can be profitable at a 25% win rate. What matters is that your ratio and your win rate together produce positive expectancy, which this calculator shows directly.
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Learn the concept
Risk/reward ratio, explained
The risk/reward ratio compares what you stand to lose against what you stand to gain. Learn how it pairs with win rate to determine profitability.
Educational tool. Not financial advice. More tools