Risk Reward Ratio Calculator — Free Forex R:R Tool
A planned risk/reward ratio compares the distance to the stop with the distance to the target. It does not establish whether a strategy is profitable without information about realized wins, losses and costs. Stop and target belong on opposite sides of entry. Moving a target farther away can reduce the chance of reaching it; it does not improve expectancy automatically. Measure realized average payoff after partial exits and costs. Exactly one-third wins at 2:1 breaks even before costs; rounded 33% is slightly below that threshold.
Updated · Reviewed by Foysal Mostafa
Results
R:R Ratio
1:2.00
Risk (pts)
0.0050
Reward (pts)
0.0100
Min Win Rate to Break Even
33.3%
Planned payoff before costs. Profitability also depends on realized win rate and execution.
Why Use the Risk / Reward Calculator?
A planned risk/reward ratio compares the distance to the stop with the distance to the target. It does not establish whether a strategy is profitable without information about realized wins, losses and costs. Compare the displayed result with the worked example and confirm the assumptions before using it.
Formula Used
Reward multiple = target distance / stop distance; break-even win % = 100 / (1 + reward multiple)Worked Example
For a long entry at 100, stop at 95 and target at 110, risk is 5 and reward is 10: risk:reward is 1:2. One +2R winner and two −1R losers sum to zero before costs. A 40% win rate at the same realized payoff gives 0.4 × 2 − 0.6 = +0.2R per trade before costs.
How to Use the Risk / Reward Calculator — Step by Step
- 1
Enter the stated inputs
Use the units shown next to each field. Replace sample rates and rules with values applicable to your instrument and account.
- 2
Check a worked example
For a long entry at 100, stop at 95 and target at 110, risk is 5 and reward is 10: risk:reward is 1:2. One +2R winner and two −1R losers sum to zero before costs. A 40% win rate at the same realized payoff gives 0.4 × 2 − 0.6 = +0.2R per trade before costs.
- 3
Interpret the result
Stop and target belong on opposite sides of entry. Moving a target farther away can reduce the chance of reaching it; it does not improve expectancy automatically. Measure realized average payoff after partial exits and costs. Exactly one-third wins at 2:1 breaks even before costs; rounded 33% is slightly below that threshold.
What Your Risk / Reward Calculator Results Mean
Calculation basis
Reward multiple = target distance / stop distance; break-even win % = 100 / (1 + reward multiple)
Interpretation and limits
Stop and target belong on opposite sides of entry. Moving a target farther away can reduce the chance of reaching it; it does not improve expectancy automatically. Measure realized average payoff after partial exits and costs. Exactly one-third wins at 2:1 breaks even before costs; rounded 33% is slightly below that threshold.
Risk / Reward Calculator — Frequently Asked Questions
Q.How is this calculated?
Reward multiple = target distance / stop distance; break-even win % = 100 / (1 + reward multiple)
Q.What example can I use to check the arithmetic?
For a long entry at 100, stop at 95 and target at 110, risk is 5 and reward is 10: risk:reward is 1:2. One +2R winner and two −1R losers sum to zero before costs. A 40% win rate at the same realized payoff gives 0.4 × 2 − 0.6 = +0.2R per trade before costs.
Q.What assumptions or limitations matter?
Stop and target belong on opposite sides of entry. Moving a target farther away can reduce the chance of reaching it; it does not improve expectancy automatically. Measure realized average payoff after partial exits and costs. Exactly one-third wins at 2:1 breaks even before costs; rounded 33% is slightly below that threshold.
About the Author
Forex Trader & Software Developer · Founder, TradeCalc
Active forex trader since 2019, specializing in risk management and systematic position sizing. Built TradeCalc to replace manual spreadsheets used in live trading. Calculator formulas are checked with worked examples and automated regression tests. Broker-specific rules and execution outcomes still need independent confirmation.
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