Risk reward ratio calculator
Before you click buy you should know what the trade can make, what it can cost and how often it must work to be worthwhile. Enter entry, stop, target and size, along with fees and your normal win rate, and the calculator gives the reward-to-risk ratio, the break-even win rate and the average result each time you take the trade. A table compares the same setup with closer and further targets.
The money on each side of the trade
What you stand to lose and to make on this trade, after fees.
The same entry and stop with other targets
Moving the target changes the ratio and the win rate you need. Every row uses your win rate, which flatters distant targets because they are reached less often in reality.
| Target | Price | Reward | Break-even win rate | Expected at your win rate |
|---|
How the ratio and the expectancy are found
Risk and reward are measured from the entry price. Fees make every trade slightly worse, so they are taken off the reward and added to the risk.
Risk
Gap to the stop, times position size, plus fees.
risk = |entry − stop| × size + fees
Reward
Gap to the target, times position size, minus fees.
reward = |target − entry| × size − fees
Ratio
How many risk units the reward is worth.
reward to risk = reward ÷ risk
Break-even win rate
How often the trade must work for wins to pay for losses exactly.
break-even = risk ÷ (risk + reward)
Expectancy
What the trade earns on average each time, at your win rate.
expected = win rate × reward − (1 − win rate) × risk
Risk and reward FAQ
How is the risk reward ratio calculated?
Take the gap between entry and target and divide it by the gap between entry and stop. Buying at $100 with a $96 stop and a $110 target risks $4 to make $10, a reward to risk of 2.5, often written 1:2.5. On small moves, include fees, since they cut the reward and add to the risk.
Which risk reward ratio is good?
That depends on how often you win. At 1:2 you need to win just over a third of trades, and at 1:1 just over half. Scalpers often live with small ratios and high win rates, while trend followers accept low win rates for big ratios.
What win rate does a trade need to break even?
Risk divided by risk plus reward. At 1:2 that is 1 divided by 3, roughly 33 percent. The calculator shows it for your trade and for a spread of other targets.
Is a bigger ratio always the better trade?
No. A distant target gets hit less often, so a 1:5 trade can be worse than a 1:2 if it rarely gets there. Expectancy is what counts: how often you win times what you win, minus how often you lose times what you lose.
Is this the same as R multiples?
Yes, the same idea. One R is the amount risked, so a trade that makes twice that is a 2R winner. Thinking in R puts trades of any size on one scale.
Do fees really matter?
On short-term trades, yes. A $10 round-trip fee barely registers on a $1,000 target but can turn a small scalp into a loss, so the calculator removes fees from the reward and adds them to the risk.