Win Rate and Risk-Reward Calculator

Enter entry, stop and target to compute risk, reward, R:R and the win rate you need to break even.

Calculators

Inputs

Assumes a long trade. Rule: Entry > Stop and Target > Entry.

Results

Risk / share
—
Reward / share
—
Risk–Reward (R:R)
—
Win rate to break even
—

Understanding Win Rate & Why It Matters

Win rate is the percentage of successful trades out of all trades. If you win 6 of 10, your win rate is 60%. It’s useful—especially for active traders—but must be paired with risk–reward to judge profitability. A trader with a 40% win rate can still be highly profitable if R:R is strong.

Formula
win rate (%) = (wins ÷ total trades) × 100
example: 25 wins of 50 ⇒ 50%

The Risk–Reward Ratio: A Core Trading Principle

The R:R compares potential profit to potential loss. Risking $50 to make $100 is 1:2. A favorable R:R (1:2 or higher) can be profitable even with modest win rates.

Formula
R:R = reward ÷ risk
example: target $300, risk $100 ⇒ 3 (1:3)

How to Calculate & Use the Win-Rate / R:R Calculator

  1. Input risk (often 1–2% of capital per trade).
  2. Enter target to compute reward.
  3. Provide win rate from your journal/backtests.
  4. Review outputs to confirm positive expectancy.
Tip

Many profitable systems target R:R from 1:2 to 1:3+.

Real-Life Example (Alex)

Alex trades a $10,000 account, risks 1% per trade ($100) and targets 1:3. With a 45% win rate, Alex stays profitable across 20 trades because each win nets 3× a loss.

Risk
$100
Reward
$300

Common Misconceptions

  • High win rate with poor R:R (e.g., risk 5 to make 1) can still be unprofitable.
  • Lower win rate with strong R:R (e.g., 1:3) can be very profitable.
  • Focus on expectancy, not just % of wins.

Use Win-Rate & R:R to Improve Your Strategy

  • Backtest to learn your actual win rate.
  • Tune targets/stops to lift R:R if your win rate isn’t high.
  • Aim for at least 1:2 as a baseline.
  • Set realistic expectations and stay consistent through drawdowns.
Why Consistency Wins

Swapping systems often undermines edge. Tracking win rate and R:R builds the confidence to stay disciplined while expectancy plays out.

Final Takeaways: Risk Management = Longevity

Preserving capital matters more than any single win. Using sensible stops and keeping R:R at 1:2+ can keep you profitable even through losing streaks.

Example: risk 2% per trade × 50% win rate × 1:2 R:R can still compound.

  • Quantify your edge with win-rate × R:R.
  • Use the calculator to validate positive expectancy.
  • Document trades—adjust targets/stops, not discipline.
  • Favor simple, repeatable rules.