Trade Planning Calculator
Risk/Reward + R-Multiple
Enter your entry, stop-loss, and target price to calculate the risk-to-reward ratio, R-multiple, and the minimum win rate you need to break even.
Disclaimer: Informational and educational only. Not financial advice. Not a recommendation to buy or sell. Past performance does not guarantee future results. Trading involves substantial risk of loss.
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Your planned entry
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Exit if wrong
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Your profit target
Results
Risk (per share)
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Reward (per share)
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Risk:Reward Ratio
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R-Multiple (reward in R units)
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Break-Even Win Rate
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Understanding Risk/Reward & R-Multiples
What is a risk-to-reward ratio?
The risk-to-reward ratio (R:R) compares potential loss (entry to stop-loss) to potential gain (entry to target). A 1:2 ratio means you're risking $1 to potentially make $2. Expressed as "1:2" or "2R".
What is an R-multiple?
An R-multiple expresses profit or loss as a multiple of the initial risk (1R). A trade that returns twice the amount you risked is called a 2R trade. Tracking trades in R-multiples lets you compare results across trades of different sizes.
How is the break-even win rate calculated?
Break-even win rate = 1 ÷ (1 + R-multiple). For a 2R trade: 1 ÷ (1 + 2) = 33.3%. You need to win more than 33.3% of trades to be profitable before costs. At 1R it's 50%. This is mathematical fact, not a performance projection.
Does higher R:R always mean better?
Not necessarily. A higher R:R requires a lower win rate to break even, but in practice wider targets may be hit less often. The relationship between R:R and win rate determines expected value — but past results do not guarantee future performance.