Risk Reward Ratio Calculator
Compare the risk and reward of a trade from your entry, stop loss, and target prices.
Risk Reward Ratio Calculator
For a long trade, the stop loss must be below the entry price and the target must be above it. Risk is what you lose if the stop is hit; reward is what you gain if the target is hit. This is a planning estimate, not a guarantee of profit.
Risk : Reward ratio
1:3
Breakeven win rate means: at a 1:3 ratio, you would need to win about 25.00% of such trades to break even, before fees and taxes. A higher ratio lowers the breakeven win rate, but it does not make any single trade more likely to win.
About our Risk Reward Ratio Calculator
The Risk Reward Ratio Calculator compares what you stand to lose against what you stand to gain on a single trade. Enter your entry price, stop loss price, and target price to see the risk per share, the reward per share, and the ratio written as 1:ratio. It also shows the breakeven win rate, which is the share of similar trades you would need to win to break even before fees and taxes.
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Frequently Asked Questions
What is a risk reward ratio?
It compares the amount you risk on a trade with the amount you aim to gain. If you risk 10 per share and target a gain of 30 per share, the ratio is 1:3, meaning the potential reward is three times the risk.
How do I calculate the risk reward ratio?
Subtract the stop loss from the entry price to get the risk, subtract the entry price from the target price to get the reward, then divide the reward by the risk. For example, entry 100, stop 90, and target 130 give a risk of 10, a reward of 30, and a ratio of 1:3.
What is the breakeven win rate?
It is the percentage of similar trades you would need to win to break even, calculated as 1 divided by (1 + ratio), times 100. At a 1:3 ratio the breakeven win rate is 25%. It does not include fees or taxes, and it does not predict whether any single trade will win.
Is a higher risk reward ratio always better?
Not necessarily. A higher ratio lowers the breakeven win rate, but targets that are further away are often harder to reach. A ratio is only one part of a trading plan, alongside position size, fees, and how often the setup actually works.
Why does the calculator say my setup is invalid?
For a long trade, the stop loss must be below the entry price and the target must be above it. If either condition is not met, there is no valid risk or reward to compare, so the calculator asks you to adjust the prices instead of showing a misleading result.