Risk Reward Calculator
Enter where you get in, where you are wrong and where you take profit. See the ratio, the win rate you need, and whether the trade pays over time.
Works for any market: forex, gold, indices, shares or crypto. Stop below entry for a long, above for a short.
The target is on the wrong side of your entry for a trade.
Pips, points or dollars. Just use the same unit for both.
Risk : Reward
Ratio
Break-even win rate
Expectancy / trade
Before spread, commission and swap. Expectancy assumes every loss is exactly one R and every win exactly the target.
How the risk reward ratio works
The risk reward ratio compares what a trade loses if the stop is hit with what it makes if the target is hit. Risking 30 pips to make 60 is 1 : 2. The ratio on its own says nothing about whether the trade is good. It tells you the win rate you need.
Formulas
Ratio (R) = target distance / stop distance
Break-even win rate = 1 / (1 + R)
Expectancy = (win rate × R) - (1 - win rate)
Example: 1 : 2 breaks even at 33.3%. Winning 45% of the time gives 0.45 × 2 - 0.55 = +0.35R per trade, so £35 per trade when £100 is at risk.
A positive expectancy means the strategy makes money over many trades even though most individual trades may lose. A trader winning 40% at 1 : 2 is profitable. A trader winning 70% at 1 : 0.3 is not. The win rate people brag about matters far less than the pairing.