Risk Reward Calculator
Is this trade setup worth taking?
Calculate your R:R ratio, potential profit, and the win rate you need before entering any trade.
A risk reward calculator compares how much you stand to lose versus how much you could gain on a trade. To calculate it, divide the distance from your entry to your take profit by the distance from your entry to your stop loss. A 1:2 ratio means you risk $1 to make $2. Works as a risk reward calculator for forex, stocks, and crypto — enter position size for the dollar version, or skip it for the ratio-only version. By understanding your R:R before entering a position, you can align your setups with the mathematical laws of expectancy, ensuring you only take trades that offer a statistical edge.
R:R Ratio = (Take Profit – Entry) ÷ (Entry – Stop Loss)
How the Formula Works
A risk reward calculator compares how much you stand to lose versus how much you could gain on a trade. To calculate it, divide the distance from your entry to your take profit by the distance from your entry to your stop loss. A 1:2 ratio means you risk $1 to make $2. Works as a risk reward calculator for forex, stocks, and crypto — enter position size for the dollar version, or skip it for the ratio-only version. By understanding your R:R before entering a position, you can align your setups with the mathematical laws of expectancy, ensuring you only take trades that offer a statistical edge.
Formula Expression
Example Calculation
"If you buy a stock at $100, set a stop loss at $95 (risk $5), and a take profit at $115 (reward $15): R:R Ratio = ($115 – $100) ÷ ($100 – $95) = 15 ÷ 5 = 3 (representing a 1:3 Risk/Reward ratio)."
How to Use This Risk/Reward Calculator
Select Position Direction
Choose Long (buying, expecting price to rise) or Short (selling, expecting price to fall). This determines how the calculator interprets your stop and target prices. The direction dictates whether your stop loss lies below or above your entry price.
Enter Your Trade Prices
Input your entry price, stop loss price, and take profit price. These should match the exact levels you place your orders. Finding these prices on your chart first ensures the calculation reflects structural support and resistance levels.
Set Position Size
Enter the number of shares, contracts, or units you plan to trade. The calculator will show both the ratio and the actual dollar P&L for your position size. This converts the abstract ratio into actual, tangible risk capital values.
Check the Breakeven Win Rate
The calculator shows the minimum win rate you need with this R:R ratio to be profitable over time. If your historical win rate is above this number, the trade has positive expected value. This prevents you from taking setups with poor risk-reward profiles.
High R:R vs. High Win Rate Strategies
Compare the expectancy and psychological profiles of different strategy archetypes.
| Feature | High R:R / Low Win Rate (Trend Follower) | Low R:R / High Win Rate (Scalper)Best |
|---|---|---|
| Average Win Size | Large (3x to 5x of average loss) | Small (0.5x to 1.5x of average loss) |
| Average Win Rate | 30% to 45% | 60% to 75% |
| Drawdown Volatility | Higher (longer losing streaks) | Lower (smoother equity curve) |
| Psychological Comfort | Harder (requires high discipline) | Easier (frequent wins) |
Risk/Reward Calculator — Frequently Asked Questions
- Using a risk reward calculator forex mode is simple: enter your currency pair entry price, stop loss level, and profit target price. The calculator computes the exact pip distance of both zones and divides them to return your risk-reward ratio. By running as a responsive web app, TradeZully replaces the need to carry manual spreadsheets or perform mental math while trying to execute trades during fast-moving market sessions.
See how your math plays out in real trades
Import your trades into TradeZully to see if your execution matches the calculator. Real data, automatic sync, no spreadsheets.
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