Risk/Reward Calculator
Enter your entry, stop-loss and take-profit to see the reward-to-risk ratio and the win rate you need just to break even.
How to use the risk/reward calculator
Type in your planned entry price, stop-loss and profit target. The calculator works for long and short trades: it reads the direction from where your stop and target sit relative to the entry. It returns the ratio as 1 : R and the break-even win rate before trading costs.
How the risk/reward ratio works
Risk is the distance from entry to stop. Reward is the distance from entry to target. The ratio is reward divided by risk.
Example: buy at 1.1000 with a stop at 1.0970 and a target at 1.1060. Risk is 30 pips and reward is 60 pips, so the ratio is 1 : 2.
Break-even win rate
The break-even win rate is 1 ÷ (1 + R). At 1 : 2 you need to win more than 33.3% of trades to break even before costs. At 1 : 1 you need more than 50%. At 1 : 3 you need more than 25%.
| Risk/reward | Break-even win rate |
|---|---|
| 1 : 1 | 50.0% |
| 1 : 1.5 | 40.0% |
| 1 : 2 | 33.3% |
| 1 : 3 | 25.0% |
Is a higher ratio always better?
No. Distant targets are hit less often, so a higher ratio usually comes with a lower win rate. What matters is the combination of the two, measured over many trades. Track yours in a trading journal and size each trade with the position size calculator.
Frequently asked questions
What is a good risk/reward ratio?
There is no single best ratio. It depends on your win rate. Many traders aim for at least 1 : 1.5 or 1 : 2, then check that their actual win rate clears the break-even level.
How do you calculate risk/reward?
Divide the distance from entry to target by the distance from entry to stop-loss. A 60-pip target with a 30-pip stop is 1 : 2.
What win rate do I need at 1:2?
More than 33.3% of trades must win to break even before spread and commission.
Does risk/reward include trading costs?
No. Spread, commission and swaps reduce real results, so your actual break-even win rate is slightly higher.