Risk to reward calculator
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Your R multiple, and the win rate it needs to break even.
Levels
R = (target - entry) / (entry - stop)breakeven win rate = 1 / (1 + R)Both distances are measured from the entry, so the ratio holds whatever the instrument and whatever the size. Only the direction of the stop and target changes between a long and a short.
- Long from 1.0850, stop at 1.0800, target at 1.0980.
- Risking 0.0050 to make 0.0130.
- 0.0130 / 0.0050 = 2.6R.
- 1 / (1 + 2.6) = 27.8%, the win rate that setup needs to break even.
Worth knowing
No, and this is the trap. A 5R target has a lower breakeven win rate on paper and is also further away, so it is hit less often. The ratio is only worth having if your actual win rate clears the number below it.
Your risk expressed as one unit. If you risk $200 and make $600, that is 3R whatever the account size, which is what makes trades comparable across accounts and instruments.
No. It is the pure price arithmetic. Spread and commission push the real figure a little higher, so treat the number here as the floor rather than the target.
The calculation is the easy half
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