Risk/reward ratio calculator
“For these three prices — entry, stop and target — what is the reward-to-risk ratio, and what win rate would that ratio need to break even?”
Three prices decide a trade's shape before anything happens to it. This calculator turns entry, stop and target into a reward-to-risk ratio and, more usefully, into the break-even win rate that ratio implies — which is what makes ratios from different setups comparable.
Free to use, nothing to sign up for, and nothing you type here is sent anywhere — the arithmetic runs in your browser.
What it computes
risk per share = |entry - stop| reward per share = |target - entry| R:R = reward / risk risk %, reward % = each as a share of entry break-even win rate = 100 / (1 + R:R)
What you type in
| Field | What it means | Example |
|---|---|---|
| Entry | Planned entry. | 100 |
| Stop loss | Exit for a loss. | 95 |
| Take profit | Exit for a gain. | 110 |
| Direction | Long or short. | Long |
| Account size / risk % | Optional, for the position-size read-out. | $10,000 / 1% |
Reading the result
- Risk and reward per share, in price and as a percentage of entry.
- The reward-to-risk ratio.
- The break-even win rate — the share of trades this ratio needs to win just to cover the losers, before costs.
- A price ladder showing the risk and reward zones from the entry.
Worked example
Entry 100, stop 95, target 110, long.
- Risk $5 per share (5% of entry), reward $10 per share (10%)
- R:R = 2.0
- Break-even win rate = 33.3%
At 2R, a third of the trades winning covers the other two thirds losing, before costs. That conversion is what makes the ratio mean something — a ratio on its own does not say whether an approach breaks even.
What trips people up
- The ratio is not an edge on its own. A 5R setup that wins 10% of the time loses money; the break-even win rate is what turns the ratio into something comparable.
- It ignores costs. The fees calculator is where those land, and they raise the win rate needed.
- Nothing here says a target is reachable. It is arithmetic on three prices supplied by you.
Questions
- What is a good risk/reward ratio?
- The question does not have an answer without a win rate. A 1.5R approach at a 60% win rate and a 3R approach at a 30% win rate are both above break-even; a 5R approach at 10% is not. That is why the break-even win rate is displayed next to the ratio.
- Does it work for shorts?
- Yes. Set the direction and the arithmetic flips; the risk and reward distances are absolute either way.
Related calculators
These are the same calculators built into Ledger of Alpha, where they read your own trade history instead of numbers you re-type. See the full product
Keep the record these numbers come from
A free account logs the trades you size here, so the win rate and averages you type into these calculators come from your own history rather than a guess.