Risk/Reward Calculator
Three numbers tell you whether the trade is even worth taking. Set your entry, stop, and target. We'll do the math and show you the win rate you actually need.
Three numbers tell you whether the trade is even worth taking. Set your entry, stop, and target. We'll do the math and show you the win rate you actually need.
Educational only. Not financial or trading advice. Calculator does not account for slippage or fees.
At your R-multiple, here's what you net (in $) for every $1 you risk, at common win rates:
| Win rate | Net per $1 risked | Outcome |
|---|
R is the ratio between what you stand to make and what you stand to lose on a trade. If your stop is $2 below your entry and your target is $6 above, your R is 3 — you risk $1 to make $3. R is the only number that lets you compare a trade in $50 stock against a trade in a $5 stock against an options play. It strips out the dollar amount and leaves the shape of the trade.
New traders chase win rate. Experienced traders chase R. Here's why: at 3R, you only need to win 25% of the time to break even. At 1R, you need to win 50%. At 0.5R, you need to win 67%. The higher your R, the more your strategy can survive a bad week, a bad month, a misread setup. The math works for you instead of against you.
This is also why "I'm right 70% of the time" is not the flex traders think it is. If you take 0.3R trades, you need to be right 77% of the time just to break even. Most aren't, over a long-enough sample.