Risk/Reward Calculator
The risk/reward calculator shows you the ratio between what you stand to lose and what you stand to gain on any trade. A favorable risk/reward ratio is one of the most important factors separating consistently profitable traders from those who blow their accounts — even with a below-50% win rate, a good R:R ratio keeps you profitable.
Risk / Reward Ratio
1 : 3.00
Risk (Stop Distance)
$5.0000
Reward (TP Distance)
$15.0000
Breakeven Win Rate
25.0%
How to use this calculator
- 1
Enter your entry price
The price at which you plan to enter the trade, for either a long or short position.
- 2
Enter your stop loss price
Your exit price if the trade moves against you. This defines your maximum dollar risk.
- 3
Enter your take profit price
Your target price where you plan to close the trade for a profit.
- 4
Read the R:R ratio
The calculator shows your risk/reward ratio (e.g., 1:2 means you risk $1 to make $2) and the minimum win rate you need to break even.
Formula
R:R Ratio = Reward ÷ Risk
Risk = |Entry Price − Stop Loss Price|
Reward = |Take Profit Price − Entry Price|
Breakeven Win% = 1 ÷ (1 + R:R Ratio) × 100The risk is the absolute distance from entry to stop loss, and the reward is the absolute distance from entry to take profit. Divide reward by risk to get your R:R ratio. The breakeven win rate tells you the minimum percentage of trades you need to win just to break even at this R:R — any win rate above that is profitable.
Worked Example
Entry: $100.00 Stop Loss: $95.00 Take Profit: $115.00 Risk = |$100 − $95| = $5.00 Reward = |$115 − $100| = $15.00 R:R Ratio = $15 ÷ $5 = 1:3 Breakeven Win Rate = 1 ÷ (1 + 3) × 100 = 25% This means you only need to win 1 in every 4 trades (25%) to break even. Any win rate above 25% generates long-term profit at a 1:3 R:R.
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