Risk/Reward Calculator
Enter your entry, stop, and target to see the planned reward:risk ratio, risk and reward per share, and the break-even win rate your setup requires.
Educational only. Not financial or trading advice. Does not account for slippage, fees, partial exits, or stop execution.
Expected return per dollar risked
At this planned reward:risk ratio, net result for every $1 risked at common win rates, before trading costs:
| Win rate | Net per $1 risked | Outcome |
|---|
What risk/reward measures
This calculator compares the reward at your planned target with the risk at your planned stop. If your stop is $2 below entry and your target is $6 above, the planned reward:risk ratio is 3:1. You are risking $1 for $3 of potential reward.
Why break-even win rate matters
Risk/reward and win rate belong together. At a planned 3:1 ratio, a 25% win rate is the mathematical break-even point before trading costs. At 1:1 it is 50%. At 0.5:1 it is about 67%.
The figures here describe a plan, not what ultimately happened. Realized R-multiple is a post-trade measurement: the actual outcome divided by the initial risk accepted when the trade was opened.
Common mistakes
- Moving the stop farther away. That increases risk and lowers the planned ratio unless the target changes too.
- Confusing the target with the actual exit. A 3:1 plan does not guarantee a 3R realized result.
- Choosing a target only to improve the ratio. Stops and targets should come from a plan you would actually execute.