Risk-Reward Ratio Calculator
Position sizing controls how much you lose; risk-reward decides whether the trade is worth taking at all. Enter your entry, stop loss, and take profit to see the ratio, your breakeven win rate, and expectancy.
Results
Fill in the inputs to see your results.
What the risk-reward ratio tells you
The risk-reward ratio compares your potential loss to your potential gain. A trade risking $100 to make $300 has a 3:1 ratio. The ratio directly determines the win rate you need to break even: at 1:1 you must win 50% of trades; at 2:1 only 33%; at 3:1 just 25%.
This is why profitable traders can be wrong most of the time. A strategy with a 3:1 average ratio only needs to win 30% of trades to make money. Enter your win rate above and the calculator shows your expectancy — the average R you earn per trade over time.
Ratio first, then size
Risk-reward and position sizing are a pair: filter trades by ratio first, then size the survivors. Many traders require a minimum of 2:1 before a trade qualifies. Use this calculator to check the ratio, then the position size calculator to set the size.
Frequently asked questions
What is a good risk-reward ratio?
A minimum of 2:1 is the common standard — you only need to be right one third of the time to break even. Whether higher is better depends on your win rate; very high ratios usually come with lower win rates.
How do I calculate breakeven win rate?
Breakeven win rate = 1 ÷ (1 + reward/risk ratio). At 2:1 that is 33.3%; at 3:1 it is 25%. Win more than this and the strategy is profitable before costs.
What is expectancy in trading?
Expectancy is the average R (multiple of your risk) earned per trade: (win rate × ratio) − (loss rate × 1). A 40% win rate at 2:1 gives 0.4 × 2 − 0.6 = +0.2R per trade — at 1% risk, that is +0.2% of account per trade on average.