Risk/reward and R-multiple calculator

Your numbers

The planned or actual entry.

Defines 1R: the distance from the entry to the stop.

Where you plan to take profit, on the other side of the entry from the stop.

An actual or hypothetical exit, shown as an R multiple.

Results

Reward-to-risk (R:R)
2.40
Risk per share (1R)
$2.50
Reward per share
$6.00
Break-even win rate
29.4%
Exit as an R multiple
+1.20R
Direction
Long

An educational tool: results leave out commissions, slippage and gaps. Nothing you enter is sent or saved. Not investment advice.

How to use it

  1. Enter the entry and the stop. Their distance is 1R, the unit every result is measured in.
  2. Enter the target to see the reward-to-risk ratio and the win rate at which a series of such trades would break even before costs.
  3. Optionally enter an exit price to express the result in R: +2R means the trade made twice its initial risk, −1R is a full stop-out.

The formula

1R = |entry − stop|

R:R = |target − entry| ÷ 1R

Break-even win rate = 1 ÷ (1 + R:R)

R multiple = (exit − entry) ÷ 1R for a long, (entry − exit) ÷ 1R for a short.

Worked example

Illustrative numbers: entry $50, stop $47.50, target $56. 1R is $2.50 and the reward is $6, so the R:R is 2.4. A series of trades like this breaks even at a win rate of about 29.4% (1 ÷ 3.4), before commissions and slippage.

If the trade is closed at $53 instead of at the target, the result is +1.2R ($3 ÷ $2.50). A stop-out at $47.50 is −1R.

Questions

What is a good risk-reward ratio?

No ratio is good on its own: it only means something together with the win rate. A 3:1 target that is rarely reached can do worse than a 1.5:1 target that is reached often. Compare the break-even win rate with the win rate your own records show.

What is an R multiple?

An R multiple expresses a trade’s profit or loss in units of its initial risk, the distance from the entry to the stop. It makes trades of different sizes and prices comparable, which is why trade journals and system tests often report results in R.

How is the break-even win rate calculated?

It is 1 ÷ (1 + R:R). At 1:1 a series of trades needs to win 50% of the time to break even, at 2:1 about 33.3% and at 3:1 25%, before costs.

Is anything I enter saved?

No. The calculation runs in your browser; nothing is sent to Clear Tape or stored.

Related guides

Other calculators

From the calculation to the record

Save the entry, stop and target as a plan before the trade, then log the fills. The journal works out R, expectancy and drawdown from your own trades, and its AI score grades how closely each trade followed the plan. A free account is all it takes.