Risk/reward calculator

The reward-to-risk ratio of a planned trade, and the win rate it needs just to break even.

Worked example

Reward:risk = |target − entry| ÷ |entry − stop|. Break-even win rate = 1 ÷ (1 + reward:risk), before fees.

Example: entry 100, stop 95, target 110 risks 5 to make 10, a 2 : 1 trade. It breaks even if one trade in three wins (33.3%).

Common questions

What is a good risk/reward ratio?

There is no universal answer: a 1 : 1 setup that wins 60% of the time is profitable, and a 3 : 1 setup that wins 20% is not. The ratio only means something next to your real win rate for that setup.

Does this include fees?

No. Fees and slippage raise the break-even win rate slightly, more so on small accounts and short holds.

More calculators

Position size calculatorHow many shares to buy so that, if your stop is hit, you lose exactly the amount you decided to risk.R-multiple calculatorMeasure a closed trade in units of what you risked, so trades of different sizes compare fairly.Profit factor & expectancy calculatorPaste the profit or loss of each closed trade, one per line or separated by commas.

Stop calculating by hand

TradeGreen connects to your broker read-only and works out R-multiple, win rate, profit factor and expectancy for every setup, from your real fills.

Download on iPhone Get it on Google Play

Educational tool, not investment advice. TradeGreen describes trades that already happened and never recommends what to buy.