Risk Reward Calculator

The risk-to-reward ratio (R:R) compares how much you stand to lose versus how much you could gain on a trade. A 1:2 ratio means your potential profit is twice your potential loss.

Why It Matters

With a 1:2 R:R, you only need to win 34% of your trades to break even. With a 1:3 R:R, you only need 25%. This is why professional traders focus on R:R rather than win rate - you can be profitable even with more losses than wins.

Common R:R Guidelines

• 1:1 - Minimum viable. You need >50% win rate to profit.
• 1:1.5 - Acceptable. Breakeven at 40% win rate.
• 1:2 - Good. Most professional traders aim for this minimum.
• 1:3+ - Excellent. Allows for lower win rates and still profitable.

The Breakeven Formula

At 1:2 R:R: 1 / (1 + 2) x 100 = 33.3%. You need to win just 1 out of every 3 trades.