Risk/Reward Calculator

Risk/reward ratio calculator

Plan a trade before you take it: enter your entry, stop and target to see the reward-to-risk ratio and the minimum win rate that setup needs to make money.

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Runs in your browser

Entry price

Stop loss

Profit target

Shares or contracts (optional)

For the dollar risk and reward.

Risk : reward

1 : 3

Long · $2.00 risk, $6.00 reward per unit

Breakeven win rate

25.0%

Reward in R

Dollar risk

$200.00

Dollar reward

$600.00

This setup makes money over time only if it wins more than 25.0% of the time (before fees).

Stop calculating by hand

SetMetric is a free trading journal that does this math for every trade you take — position risk, R-multiples, win rate, expectancy and drawdown — and shows you which setups, times and habits make or lose you money.

How the risk/reward ratio works

Risk is the distance from your entry to your stop loss; reward is the distance from your entry to your profit target. Reward ÷ risk gives the ratio, usually written as 1:3 or 3R.

A trade that risks $2 a share to make $6 a share has a 1:3 risk/reward. If it works you make three times what you'd lose if it doesn't.

The breakeven win rate

Every risk/reward ratio has a win rate below which it loses money: breakeven win rate = 1 ÷ (1 + reward/risk).

At 1:1 you need to win more than 50% of the time, at 1:2 more than 33.3%, at 1:3 more than 25%. That's why a strategy with a modest win rate can still be very profitable — and why a high win rate with small winners and big losers can lose money.

•

1:1 → 50% to break even

•

1:1.5 → 40%

•

1:2 → 33.3%

•

1:3 → 25%

•

1:4 → 20%

Planned vs. realized risk/reward

The ratio you plan isn't the ratio you get. Exiting winners early and letting losers run past the stop both shrink your real reward-to-risk. Comparing planned and realized R across many trades is one of the most useful things a trading journal shows you.

Frequently asked questions

There's no single good ratio — it has to fit your win rate. A 1:2 ratio is profitable above a 33% win rate; a 1:1 ratio needs more than 50%. Check your actual win rate for the setup and make sure it's comfortably above the breakeven rate.

Divide the distance from entry to target by the distance from entry to stop loss. Entry $100, stop $98 and target $106 give a reward of $6 and a risk of $2, so the ratio is 1:3.

R is your initial risk on the trade. A 2R winner made twice what you risked; a -1R loss lost exactly what you planned to risk.

Yes, slightly. Fees reduce every winner and enlarge every loser, so the true breakeven win rate is a little higher than the calculator shows. The effect matters most for small, frequent trades.