Risk Reward Ratio Calculator — Free Forex R:R Tool
Enter entry, stop loss, and take profit prices to instantly see your R:R ratio and the minimum win rate needed to profit long-term. Win rate breakeven by R:R: 1:1 → 50% | 2:1 → 33.3% | 3:1 → 25% | 4:1 → 20%. Professional traders target a minimum 1:2 R:R on every trade — this calculator confirms yours before you commit capital.
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%
✓ Excellent setup — 1:2+ R:R is professional grade.
Why Use the Risk / Reward Calculator?
Most losing traders don't fail because they pick bad directions — they fail because their average loss is larger than their average win. Even a trader who is right 60% of the time will lose money if they risk $200 to make $100. This risk-reward calculator forces you to define your target and stop loss before entering, so you only take trades where the math is in your favor. A 1:2 R:R ratio means you can be wrong more than half the time and still be profitable.
Formula Used
R:R Ratio = (Take Profit Distance) ÷ (Stop Loss Distance)Worked Example
Example: Entry at 1.1000, stop loss at 1.0970 (30 pips risk), take profit at 1.1060 (60 pips reward). R:R = 60 ÷ 30 = 2.0. At this 1:2 ratio, you only need to win 33.4% of trades to break even long-term. If your win rate is 45%, your expectancy = (0.45 × 2) − (0.55 × 1) = +0.35R per trade — profitable.
How to Use the Risk / Reward Calculator — Step by Step
- 1
Enter your entry price
Input the price at which you plan to enter the trade. This is your buy price for a long trade or sell price for a short.
- 2
Set your stop loss price
Enter the price level where you will exit the trade if it moves against you. This defines your maximum risk on the trade.
- 3
Set your take profit price
Enter your target price where you will close the trade in profit. Make sure this is realistic based on market structure, not just an arbitrary level.
- 4
Read your R:R ratio
The calculator instantly shows your risk/reward ratio, the distance in points for both risk and reward, and the minimum win rate you need at this R:R to be profitable long-term.
What Your Risk / Reward Calculator Results Mean
R:R Ratio
Your risk-to-reward ratio. 1:2 means you risk 1 unit to potentially gain 2 units. Higher is better — professional traders rarely take trades below 1:1.5.
Minimum Win Rate
The lowest win rate you need at this R:R ratio to break even over many trades. Formula: 1 ÷ (1 + R:R). At 1:2 this is 33.3% — you can lose 2 out of 3 trades and still not lose money.
Risk Distance / Reward Distance
The number of pips or price units between your entry and stop loss (risk) and between your entry and take profit (reward). Larger reward distance relative to risk = better setup.
Risk / Reward Calculator — Frequently Asked Questions
Q.What is a good risk-reward ratio?
A 1:2 risk-reward ratio is generally considered the minimum for professional trading. This means you aim to make $2 for every $1 you risk. At 1:2 R:R, you only need to win 34% of trades to break even.
Q.How do you calculate risk-reward ratio?
R:R = Potential Profit ÷ Potential Loss. If your stop loss is 20 pips away and your take profit is 60 pips away, R:R = 60 ÷ 20 = 1:3.
Q.What win rate do I need at a 1:2 risk-reward ratio?
At 1:2 R:R, you need a win rate of at least 33.4% to break even. At 1:3 R:R, just 25.1% win rate achieves break-even. This is why high R:R ratios allow profitable trading even with more losses than wins.
Q.Should I always use the same R:R ratio?
Not necessarily. The optimal R:R depends on your strategy's win rate. A scalper with 70% win rate can profitably use 1:1 R:R. A swing trader with 40% win rate needs at least 1:1.5. Match R:R to your system's historical win rate.
Q.What is the best risk reward ratio for day trading?
Most successful day traders target a minimum 1:2 risk-reward ratio, aiming for $2 for every $1 risked. Some scalpers use 1:1 but require a 55%+ win rate to be profitable. Swing traders often target 1:3 or higher. The key is that your R:R and win rate must be mathematically compatible — use this calculator to find the combination that works for your strategy.
Q.What win rate do I need at each R:R ratio?
The break-even win rate is calculated as: 1 ÷ (1 + R:R ratio). Here are the exact figures: R:R 1:1 → need 50.0% win rate | R:R 1.5:1 → need 40.0% | R:R 2:1 → need 33.3% | R:R 2.5:1 → need 28.6% | R:R 3:1 → need 25.0% | R:R 4:1 → need 20.0% | R:R 5:1 → need 16.7%. These are break-even figures — you need to exceed them to be profitable after spread and commission. A strategy with 35% win rate and 3:1 R:R (expectancy: +0.40R) beats a 55% win rate strategy with 0.8:1 R:R (expectancy: −0.11R) every time.
Q.Does this risk reward calculator work for options and stocks?
Yes — the R:R formula (Potential Profit ÷ Potential Loss) applies identically to options, stocks, futures, and forex. For options: enter your net debit paid as the risk and your maximum profit target as the reward. For stocks: enter your entry price, stop loss price, and price target. For futures contracts: use price levels — the calculator outputs the ratio regardless of the underlying asset. The minimum win rate calculation is also universal: it depends only on the R:R ratio, not on the market.
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. Every calculator is cross-verified against broker platforms before publishing.
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