Risk Reward Calculator
Enter potential risk and reward amounts to see the ratio and breakeven win rate.
Calculator Inputs
Never risk more than 1% to 2% of total trading account equity on a single setup. A 1:2.0 ratio ensures profit viability with a modest 33.3% hit rate across 100 consecutive trades.
Trade Visualizer & Risk Blueprint
Scenario Stress Matrix (R-Multiples)
| Scenario / Exit Stage | Exit Price | R-Multiple | Net P&L | Portfolio Balance |
|---|---|---|---|---|
| cancel Max Stop Loss Hit | ₹3,900.00 | -1.0 R | -₹5,000.00 | ₹4,95,000.00 |
| adjust Half Target / Partial | ₹4,100.00 | +1.0 R | +₹5,000.00 | ₹5,05,000.00 |
| check_circle Planned Target (Base) | ₹4,200.00 | +2.0 R | +₹10,000.00 | ₹5,10,000.00 |
| trending_up Extended Runner | ₹4,300.00 | +3.0 R | +₹15,000.00 | ₹5,15,000.00 |
| rocket_launch Runner Max (Parabolic) | ₹4,500.00 | +5.0 R | +₹25,000.00 | ₹5,25,000.00 |
CalcTrading Trade Card
Generate a clear risk blueprint card to verify your setup, share with your trading accountability group, or journal in your execution log.
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Understanding Risk/Reward Mathematics
The Risk-to-Reward ratio compares the potential dollar loss against the potential dollar profit on a trade setup, serving as the cornerstone of positive expectancy trading.
Formal Mathematical Equations
Why Asymmetric Risk is the Only Edge
Even institutional quantitative desks with predictive algorithms frequently operate with win rates between 40% and 55%. The differentiator between compounding capital and bankruptcy is asymmetry. With a 1:2.5 risk-to-reward ratio, an analyst can be wrong 60% of the time and still generate steady portfolio growth.
quiz Frequently Asked Questions
What is a good Risk/Reward ratio for day trading?
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How does position sizing link with R:R?
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Should I include brokerage in my target?
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What is an R-Multiple in journaling?
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Companion Calculators & Workflow Tools
Traders executing with the Risk to Reward Ratio Calculator routinely pair these verified calculation engines to audit risk, transaction friction, and position expectancy.
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