Risk/Reward Ratio Calculator
Calculate the risk/reward ratio for any trade. Enter your entry, stop loss, and target to see R:R, break-even win rate, and dollar amounts instantly. No login required.
Sets target price based on entry and stop distance.
1 : 2.5
Risk / Reward Ratio
Break-even win rate: 28.6%
At 1:2.5 R:R, you need to win 28.6% of trades to break even.
Win% = 1 / (1 + R:R) = 1 / (1 + 2.5) = 28.6%
Understanding Risk/Reward Ratios
What is the risk/reward ratio?
The risk/reward ratio (R:R) compares how much you stand to lose on a trade versus how much you stand to gain. A 1:2 R:R means your potential profit is twice your potential loss. If you risk 4 points on an ES trade with a stop loss, your target should be 8 points away for a 1:2 ratio.
Why R:R matters more than win rate
Most traders obsess over win rate, but profitability depends on the combination of win rate and R:R. A trader who wins only 40% of the time can still be profitable with a 1:2 R:R — they lose $100 on six trades ($600 total) but make $200 on four trades ($800 total), netting $200. The break-even formula is simple: Win% = 1 / (1 + R:R). At 1:2, you only need to win 33.3% of your trades to break even.
How to use this calculator
Set your direction (long or short), then enter your entry price, stop loss, and target. The calculator shows your R:R ratio, a visual bar comparing risk versus reward, and the minimum win rate you need to break even. Use the quick preset buttons (1:1, 1:2, 1:3) to auto-calculate a target based on your stop distance. Toggle the dollar amounts section to see actual risk and reward in dollars based on your position size and instrument point value.
R:R Formula: Reward / Risk = (Target - Entry) / (Entry - Stop)
Break-Even: Win% = 1 / (1 + R:R) = 1 / (1 + 2) = 33.3%
Example: Entry 5500, Stop 5496, Target 5508 = 1:2 R:R, 33.3% break-even
Related Reading
How to Build a Trading Playbook from Your Reviews
Define R:R targets for each setup in your playbook and track actual outcomes against expectations.
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Try FreeThis calculator is for educational purposes only. It does not constitute financial advice. Trading futures involves substantial risk of loss. Past performance of any strategy or risk/reward ratio is not indicative of future results.