Risk/reward ratio calculator
Enter the entry price, stop loss and take profit to see how much you stand to make for every unit you risk, and how often the trade has to work just to break even.
Result
Fill in the fields to see the result
Break-even win rate by risk/reward ratio
| Risk : reward | Break-even win rate |
|---|---|
| 1 : 0.5 | 66.7% |
| 1 : 1 | 50.0% |
| 1 : 1.5 | 40.0% |
| 1 : 2 | 33.3% |
| 1 : 2.5 | 28.6% |
| 1 : 3 | 25.0% |
| 1 : 4 | 20.0% |
| 1 : 5 | 16.7% |
Break-even win rate = 1 ÷ (1 + reward ÷ risk), before costs.
How it works
The risk/reward ratio compares what a trade can lose with what it can make. The risk is the distance from the entry to the stop loss; the reward is the distance from the entry to the take profit. A long trade bought at 100 with a stop at 95 and a target at 110 risks 5 to make 10, a ratio of 1:2.
The ratio alone does not tell you whether a trade is good. What matters is how it combines with the share of trades that reach the target. The break-even win rate shows the link: with 1:2 you need to win one trade in three, 33.3%, to break even before costs; with 1:1 you need 50%; with 1:3, 25%. A setup that rarely reaches a distant target can lose money despite an attractive ratio.
The calculator works out the direction from the stop: a stop below the entry is a long, above the entry is a short. The take profit must be on the profitable side. For forex, choose an instrument to see the distances in pips and, with the lot size, in your account currency. For stocks or crypto, enter the number of shares or coins to see the amounts in the price currency.
Costs reduce the reward and increase the risk. The spread, commission and slippage on both entry and exit move the real break-even win rate up a little, which matters most for short-term trades with small targets. Treat the result as a planning number before the trade, not as a prediction of the outcome.
Use it together with the position size or lot size calculator: the risk/reward ratio tells you whether the trade is worth taking, and the sizing calculator tells you how large it can be for the risk you accept.
Formula
- Risk = |entry − stop|
- Reward = |take profit − entry|
- Risk/reward ratio = 1 : (reward ÷ risk)
- Break-even win rate = 1 ÷ (1 + reward ÷ risk)
- Pips = distance ÷ pip size; money = distance × quantity (or contract size × lots, converted)
Example
Buy EUR/USD at 1.1000 with a stop at 1.0950 and a take profit at 1.1100: the risk is 50 pips and the reward 100 pips, a ratio of 1:2. You need to win 33.3% of such trades to break even before costs. With 0.20 lots on a dollar account that is 100 dollars at risk for a potential 200 dollars.
FAQ
What is a good risk/reward ratio?
There is no single answer. A ratio only makes sense together with the win rate of your setup. 1:2 needs a win rate above 33.3% to be profitable before costs, and 1:1 needs more than 50%.
How do I calculate the break-even win rate?
Divide 1 by (1 + reward ÷ risk). For a 1:2 ratio that is 1 ÷ 3 = 33.3%.
Is risk/reward written as 1:2 or 2:1?
Both appear. This calculator writes risk first, so 1:2 means you risk 1 to make 2. Some platforms show the reward-to-risk ratio as 2 instead.
Does it work for short trades?
Yes. Put the stop above the entry and the take profit below it; the calculator recognises the short automatically.
Should I include costs?
For an exact result, yes. Spread, commission and slippage make the real risk larger and the reward smaller, so the true break-even win rate is a little higher than shown.
Can I use it for stocks and crypto?
Yes. Choose prices only or enter a quantity of shares or coins. The forex option adds pips, lots and currency conversion.
Does a higher ratio mean a better trade?
Not by itself. Distant targets are hit less often. A better trade is one where the ratio and the realistic chance of reaching the target together give a positive expectation.
Other calculators
Calculations only, not investment advice. Check fees, margin rates and contract specs with your broker or exchange.