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Risk/Reward Ratio Calculator

The risk-reward calculator turns entry, stop and target into your R multiple, then the minimum win rate that ratio needs just to break even — a 2:1 trade breaks even near a 33% win rate. Runs in your browser; nothing is stored.

The risk-reward ratio is the distance from entry to target divided by the distance from entry to stop; a ratio of R needs a win rate above 1 / (1 + R) just to break even, so a 2:1 trade breaks even at a 33% win rate.

The setup

Direction

Entry

Stop

Target

R:R = reward / risk · breakeven_winrate = 1 / (1 + R:R)

The numbers

Risk / unit—

Reward / unit—

Reward : Risk—

Break-even win rate—

Type your numbers to compute the ratio.

How it works

What this calculator does

It turns a trade's potential profit and potential loss into a risk/reward ratio, then tells you the minimum win rate that ratio needs to break even over many trades. Together these answer whether a setup is worth taking better than either number alone.

The formulas

RR = reward / risk

break-even win rate = 1 / (1 + RR)

Reward is the distance from entry to target; risk is the distance from entry to stop.

Worked example

You enter at $100 with a stop at $95 (risk $5) and a target at $115 (reward $15). The ratio is 15 / 5 = 3, a 3:1 trade. The break-even win rate is 1 / (1 + 3) = 0.25, or 25%. As long as more than a quarter of these trades hit target, the strategy is profitable before fees.

What it deliberately does not do

It assumes you actually exit at the stop and target you entered. The break-even win rate also ignores partial exits and scaling out, which shift the realized ratio of a trade. It says nothing about whether your real win rate will clear the line — only your track record can estimate that. This is education, not investment advice.

Frequently asked questions

What is a good risk-reward ratio?

Many traders look for at least 2:1 or 3:1, meaning potential reward is two to three times the risk. A higher ratio lowers the win rate you need, but no ratio is 'good' if the setup rarely reaches target.

How do I calculate the break-even win rate?

Use 1 / (1 + RR). A 1:1 trade needs 50%, a 2:1 needs ~33%, and a 3:1 needs 25%. The better your reward-to-risk, the fewer winners you need.

What's the difference between risk-reward and win rate?

Risk-reward is the size of an average win versus an average loss. Win rate is how often you win. You can be profitable with a low win rate if reward-to-risk is high, and vice versa.

Does a high risk-reward ratio mean a trade is good?

Not by itself. A 5:1 setup that only hits target 10% of the time loses money. The ratio only matters relative to how often the target is actually reached.

Does this include fees and slippage?

No. The break-even win rate is the pre-cost figure; commissions and spreads raise the win rate you actually need. Treat it as an estimate for education, not investment advice.

Related calculators

Funded-account checks

Use these three pages as a simple path: understand the rules, stress a scenario, then track consistency before a payout.

1Understand the ruleCompare challenge types, drawdown floors and payout logic.2Run a breach scenarioModel intraday vs end-of-day trailing drawdown before sizing a trade.3Track consistencyCheck whether one big day is blocking payout eligibility.

Information tool only. Every result is deterministic arithmetic (for the simulator, a probability estimate) from the numbers you enter. The calculators run in your browser with no account connection and nothing stored; the pairs scanner uses delayed, cached market data (daily figures, refreshed once a day), not a live feed. This is not investment, trading, tax, or financial advice — verify against your own broker or prop firm before acting.

Disclosure. Some outbound links may be affiliate or partner links; they never change how a tool computes.