Overview
Measure setup quality before execution
Risk reward is one of the core filters for trade selection. It compares planned upside to planned downside so you can avoid low-quality setups.
Pair this with disciplined position sizing so every setup uses consistent account risk rather than emotional sizing.
Related: Position Size and Expectancy .
Setup filter
Compare potential reward against potential loss instantly.
Break-even math
Estimate the minimum win rate your setup needs over time.
Account-aware sizing
Convert account risk % into a suggested unit size from stop distance.
Calculator
Risk reward calculator
Auto-updates as you type. Switch between setup math and account risk sizing.
Outputs
Risk per unit
0
Reward per unit
0
Risk:Reward
1:0
Break-even win rate
0%
Dollar risk
$0
Dollar reward
$0
Max risk per trade
$0
Suggested units
0
Planned dollar reward
$0
Planned R multiple
0R
Break-even win rate
0%
How it works
Core formulas
Setup math
riskPerUnit = |entry - stop|
rewardPerUnit = |target - entry| (direction-aware)
rewardToRisk = rewardPerUnit / riskPerUnit
breakEvenWinRate = 1 / (1 + rewardToRisk)
Account sizing
maxRiskDollar = balance x risk%
suggestedUnits = floor(maxRiskDollar / riskPerUnit)
plannedReward = suggestedUnits x rewardPerUnit
Break-even cheat sheet
| Reward:Risk | Break-even win rate |
|---|---|
| 1:1 | 50.0% |
| 1.5:1 | 40.0% |
| 2:1 | 33.3% |
| 3:1 | 25.0% |
| 4:1 | 20.0% |
Related tools
More risk and performance tools
FAQ
Risk reward FAQs
What is risk reward ratio in trading?
Risk reward compares potential reward to potential loss in a trade setup, based on entry, stop, and target.
How is break-even win rate calculated?
Break-even win rate = 1 / (1 + reward-to-risk). A 2:1 setup needs about 33.3% wins to break even before costs.
Is a higher risk reward always better?
Not always. High ratios can still fail if hit rate is too low or execution quality is inconsistent.
Can I use this for long and short trades?
Yes. The calculator supports both directions and adjusts risk/reward calculations automatically.
Does this include spread and slippage?
Use the fee input as a rough adjustment. Real trading costs can vary and should be modeled conservatively.
Disclaimer
Educational tool only. Results are mathematical estimates based on user inputs. Not financial advice.