Risk/Reward Ratio Calculator
Risk/Reward Ratio
Calculate risk/reward from entry, stop, and target
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Break-Even Win Rate
Calculate minimum win rate needed for profitability
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Formula
R:R Ratio = Reward / Risk | Break-even Win Rate = Risk / (Risk + Reward) | Risk = |Entry - Stop Loss| | Reward = |Target - Entry|
Frequently Asked Questions
What is the risk/reward ratio?
The risk/reward ratio compares the potential loss (risk) to the potential gain (reward) of a trade. A 1:3 ratio means you risk $1 to potentially make $3. Higher ratios indicate more favorable trade setups.
What is a good risk/reward ratio?
Most professional traders aim for at least a 1:2 risk/reward ratio. This means even with a 50% win rate, you remain profitable. A 1:3 ratio is considered excellent, as you only need to win 25% of trades to break even.
How does risk/reward relate to win rate?
Break-even win rate = Risk / (Risk + Reward). With a 1:2 R:R, you need to win only 33% of trades to break even. Higher R:R ratios allow lower win rates while still being profitable.
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