Risk/reward ratio calculator
Updated 2026-09-19
The risk/reward ratio (R:R) compares how much you can lose with how much you can win on a trade. Together with your win rate it determines whether a system makes money over time.
Direction: Buy (long)
Risk (pips): 30.0
Reward (pips): 90.0
Risk/reward ratio: 1 : 3.00
Breakeven win rate: 25.0%
Expectancy per trade: +0.60 R
Educational tool: results are estimates and depend on the values you enter. Not financial advice. Trading involves risk.
The formula
R:R = distance to target ÷ distance to stop. If you risk 30 pips to make 90, the ratio is 1:3.
Breakeven win rate
Minimum win rate to not lose = 1 ÷ (1 + R:R). With R:R 1:2 you need 33.3%; with 1:1 50%; with 1:3 25%. Costs such as spread and commissions raise this threshold a little.
Expectancy
Expectancy (in R) = win rate × R:R − loss rate × 1. If positive, each trade earns that many R on average. Example: 40% wins with R:R 1:2.5 gives 0.4 × 2.5 − 0.6 = +0.4 R.
Is a higher ratio always better?
No. Very distant targets are hit less often. What matters is the combination of ratio and win rate, measured on real data or a backtest that includes costs.
Frequently asked questions
What is a good risk/reward ratio?
Many traders look for at least 1:1.5 or 1:2, but it depends on the system's win rate. A system that wins 65% of the time can work even at 1:0.7.
How do I measure in R?
Measure each result in multiples of the initial risk: a stopped trade is -1 R, a target at twice the stop is +2 R.
What does positive expectancy mean?
That, on the data used, the system earns on average. It doesn't guarantee future results and needs many trades to be reliable.