Risk reward ratio calculator
Enter where you get in, where your stop loss sits and where you plan to take profit. The calculator shows how many units of reward you aim for per unit of risk and the share of such trades you must win to break even.
Runs in your browser: nothing you enter is sent anywhere.
How to use it
- Enter the entry price, the stop-loss price and the target price.
- Optionally enter the position size in units (shares, coins, contracts) to see amounts.
- Read the ratio and the win rate you need to break even.
How it works
- Risk per unit = |entry − stop|; reward per unit = |target − entry|.
- Reward-to-risk R = reward ÷ risk.
- Break-even win rate = risk ÷ (risk + reward) = 1 ÷ (1 + R).
- Amount at risk = risk × size; potential profit = reward × size.
Worked example
A long trade: entry 50, stop 48, target 56, 100 shares. Risk is 2 per share (4% of the entry), reward 6 (12%). R = 6 ÷ 2 = 3. You break even if you win 2 ÷ 8 = 25% of such trades. With 100 shares you risk 200 to make 600.
A short trade: entry 100, stop 105, target 90. Risk 5, reward 10, R = 2, break-even win rate 33.33%.
Tips
- Set the stop where the trade idea is wrong, then size the position with the position size calculator.
- Many traders state the ratio as risk:reward (1:3); this tool shows reward ÷ risk (3).
- Not financial advice.
Frequently asked questions
How is the risk reward ratio calculated?
Risk = |entry − stop| and reward = |target − entry|. The reward-to-risk ratio is reward ÷ risk. Entry 50, stop 48 and target 56 give 6 ÷ 2 = 3, often written 1:3 risk to reward.
What win rate do I need?
If every trade ends at either the full target or the full stop, you break even when you win risk ÷ (risk + reward) of the time, which is 1 ÷ (1 + R). At R = 3 that is 25%; at R = 1, 50%.
How does it know if the trade is long or short?
From the stop: a stop below the entry is a long trade, a stop above it is a short trade. The target must be on the other side of the entry.
Is a higher ratio always better?
Not by itself. A far target is reached less often, so the needed win rate falls but the real win rate may fall too. Compare the needed win rate with your own record.
Are fees included?
No. Commissions, spread and slippage lower the reward and raise the risk, so the real ratio is a little worse.