Risk Reward Calculator: Ratio, Break-Even Win Rate & Expectancy
Enter your entry, stop and target. The calculator shows the reward-to-risk ratio, the win rate you'd need just to break even, and what your own win rate means per trade.
Reward to risk compares the distance to your target with the distance to your stop. Break-even win rate = 1 divided by (1 + reward:risk). At 1:2 you need to win about 33% of the time to break even, at 1:1 about 50%, and at 1:3 about 25%.
Risk:reward calculator
Break-even win rate = 1 ÷ (1 + R). Expectancy per trade (in R) = win% × R − loss% × 1. Both ignore spreads and commissions, which lower real results.
What risk:reward means
Reward-to-risk compares what a trade can make with what it can lose. Risk is the distance from entry to stop; reward is the distance from entry to target. A 20-pip stop with a 40-pip target is 1:2: you're risking one unit to make two.
Why win rate and R:R belong together
Neither number means anything alone. A 1:3 setup that only wins 15% of the time loses money; a 1:1 setup that wins 60% makes money. The link is the break-even win rate: 1 ÷ (1 + R).
| Reward:risk | Break-even win rate |
|---|---|
| 1:1 | 50% |
| 1:1.5 | 40% |
| 1:2 | 33.3% |
| 1:3 | 25% |
| 1:4 | 20% |
Expectancy: the number that actually matters
Expectancy is the average result per trade, in R: (win rate × average win in R) − (loss rate × 1R). At a 45% win rate and 1:2, expectancy is 0.45 × 2 − 0.55 = +0.35R per trade before costs. Track it in a trading journal over many trades; a handful of trades is noise.
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Play free, no signup →Don't force the ratio
A target should come from the chart (the next level, the other side of a range), not from a wish for 1:3. Stretching targets to hit a ratio usually lowers the win rate by more than it raises the payoff. Let structure set both the stop and the target, then judge whether the trade is worth taking.
Frequently asked questions
What is a good risk-reward ratio?
There's no single best ratio. It depends on your win rate: what matters is that win rate times reward exceeds loss rate times risk, after costs.
How do you calculate risk-reward ratio?
Divide the distance from entry to target by the distance from entry to stop. A 40-pip target and 20-pip stop is a 2:1 reward-to-risk (often written 1:2 risk-to-reward).
What win rate do I need with 1:2?
About 33.3% to break even before costs, because 1 divided by (1 plus 2) is one third.
What is expectancy in trading?
The average amount won or lost per trade, often measured in R. Positive expectancy over a large sample is what a sustainable approach needs.
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420×620 by default and it scales down to fit a narrower column. Please keep the attribution link.
Keep learning
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