Risk / Reward Ratio Calculator
Calculate the risk/reward ratio, minimum win rate to break even, and percentage risk/reward for a trade setup. For educational purposes only. Not financial advice.
Results
What is it?
The risk/reward ratio (R:R) measures how much potential reward you stand to gain for each unit of risk taken. R:R = |Take Profit − Entry| ÷ |Entry − Stop Loss|. A 1:3 ratio means you risk $1 to potentially gain $3. The minimum win rate to break even = 1 ÷ (1 + R:R). For educational purposes only — not financial advice.
How to use
Enter your entry price, stop-loss price, and take-profit target. The calculator returns the R:R ratio, the minimum win rate you need to be profitable over many trades, and the percentage risk and reward relative to entry price.
Example scenario
Entry: $50,000. Stop: $48,500 (risk = $1,500, 3%). Take Profit: $55,000 (reward = $5,000, 10%). R:R = 5000/1500 = 3.33:1. Minimum win rate = 1/(1+3.33) = 23.1%. You only need to win 1 in 4 trades to break even at this ratio.
Pro tip
Most professional traders target a minimum 2:1 R:R ratio (win rate needed: 33%). A high R:R ratio allows profitability even with a relatively low win rate. Combining a 2:1 R:R with a 50% win rate produces a strong expected value: (0.5 × 2) − (0.5 × 1) = +0.5R per trade. Focus on setups with clear levels, not on predicting direction with high accuracy.