What is a risk–reward ratio?

It compares potential gain to potential loss on a trade (Reward ÷ Risk). Example: risk $100 to make $300 = 1:3.

How do you calculate breakeven win-rate from R:R?

Breakeven win-rate = 1 ÷ (1 + R). For 1:2 (R=2), you need ~33.3% wins to break even.

What is trading expectancy?

Expectancy = Win% × Average Win − Loss% × Average Loss. It’s the average P/L per trade over many trades.

Trade planningExpectancy basics

Risk–Reward Ratio (Quick)

Enter distances or prices. We’ll compute your R:R, the breakeven win-rate, and a quick expectancy preview—then visualize both.

R:R ratioBreakeven win-rateExpectancy (R)

Inputs

Risk distance

Entry → Stop (pts, $, ticks)

Reward distance

Entry → Target (same units)

Assumed win-rate (%)

Used only for expectancy preview.

Results

Risk ⇄ Reward

2.00 : 1

RiskReward

Ratio is Reward ÷ Risk. Example: 2.00 : 1 means your target is 2× your stop distance.

Breakeven win-rate

33.33%

p = 1 / (1 + R)

Expectancy preview (per trade)

0.500 R

Assumes AvgLoss = 1R and AvgWin = R. Formula: E_R = p·R − (1−p).

Educational only—factor in commissions, spread, and slippage when using live orders.

Why R:R & breakeven matter

Risk–Reward (R:R): expected return per unit of risk; e.g., risk $100 to make $300 = 1:3 (0.33). A lower ratio value (e.g., 0.33) means more potential reward than risk.

Formulas used

RR = Reward ÷ Risk • Breakeven win-rate = 1 ÷ (1 + R) • Expectancy = Win% × AvgWin − Loss% × AvgLoss.

Many traders aim for setups around 1:2 or better, but R:R is just one tool—position sizing and risk caps (e.g., 1–2% per trade) still matter.

Note: transaction costs and slippage affect realized results; factor them into averages and sizing.

Want deeper sizing & expectancy? Try Win-Rate & Risk–Reward.

How to use the Risk-Reward Ratio calculator

Quickly measure trade quality before placing an order. Before calculating, enter accurate inputs: Enter entry, stop-loss, and target levels.

After you get the output, interpret it like this: Use the ratio to compare setups and filter low-quality trades. Practical tip: Pair ratio with win rate instead of using ratio alone.This calculator is for planning and scenario analysis, so use it with your broader risk management, position sizing, and market context before taking a real trade or investment decision.

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