Risk/Reward and R-Multiple Calculator
Turn an entry, a stop and a target into an R multiple, the win rate it needs to break even, and the expectancy it produces at the win rate you actually have.
- Risk per unit
- 4.00
- Reward per unit
- 12.00
- Reward/risk (R)
- 3.00R
- Break-even win rate
- 25.00%
- Expectancy at your win rate
- 0.60R per trade
R = reward ÷ risk. Break-even win rate = 1 ÷ (1 + R). Expectancy = (win rate × R) − (loss rate × 1). Fees, funding and slippage are not included, and all three reduce realised R.
What R actually is
R is one unit of risk — the distance from entry to stop. Expressing everything in R rather than in currency makes trades comparable across different position sizes and different instruments, which is the whole point.
risk = |entry − stop|
reward = |target − entry|
R = reward ÷ riskA 3R trade is one where the target is three times as far away as the stop. Nothing about that says it is a good trade.
R without a win rate is half an answer
The break-even win rate for a given R is 1 ÷ (1 + R):
- 1R — needs 50%
- 2R — needs ~33%
- 3R — needs 25%
- 5R — needs ~17%
Which is why "always take 3R setups" is not advice. It is a constraint that also lowers your win rate, because a target three times further away is hit less often. The two move together, and only the combination — expectancy — tells you anything.
The failure mode this catches
Widening a target to improve the R on paper is the most common way to make a setup look better while making it worse. The ratio improves, the probability of reaching the target falls, and expectancy drops. The expectancy row is there so that trade-off is visible rather than implicit.
The opposite mistake is tightening the stop to improve R. That raises the ratio and raises the frequency of being stopped out — the position size calculator shows the other half of that, which is that a tighter stop also lets you take a larger position for the same risk.
Use your own win rate, not an aspiration
The expectancy line is only worth reading if the win rate you entered came from your own records. Estimating it from how you feel about your trading produces a number that agrees with you, which is the opposite of useful. This is one of the concrete arguments for keeping a decision log — without one, the input to this calculation does not exist.
FAQ
What is a good risk/reward ratio?
The question is incomplete on its own, because R only matters alongside a win rate. A 3R setup you win 20% of the time loses money; a 1R setup you win 60% of the time makes it. What the ratio tells you is the win rate you need to break even, which is 1 ÷ (1 + R) — and that is a number you can compare against your actual record rather than against a rule of thumb.
How is the break-even win rate calculated?
For a setup risking 1 to make R, breaking even requires p × R = (1 − p) × 1, which rearranges to p = 1 ÷ (1 + R). At 1R you need 50%, at 2R about 33%, at 3R 25%. It assumes every win is a full R and every loss is a full 1, which real trading does not honour — partial exits and slippage both erode it.
What does expectancy in R mean?
It is the average result per trade measured in units of the amount you risk: (win rate × R) − (loss rate × 1). A value of 0.2R means you make on average one fifth of your risk per trade. It is the more useful summary than win rate alone, because it combines how often you are right with how much being right is worth.
Why does my realised R come out lower than planned?
Usually fees, slippage and partial exits. Entry and exit fees come off both ends, slippage widens the effective stop distance and narrows the effective target, and taking profit early caps R while leaving the full loss intact. Planned R is an upper bound; the gap between planned and realised is worth measuring rather than assuming.