R-Multiple

An R-multiple is the result of a trade expressed in multiples of the initial risk. If you risked $100 on a trade and made $300, that's a +3R trade. If you risked $100 and lost $50, that's a -0.5R trade. The R unit normalizes performance across trades of different sizes. The magic of R-multiples is that they let you compare trades directly. A 3R win on a $100 risk and a 3R win on a $1,000 risk are equally valuable for evaluating skill. The dollar amounts differ but the SKILL DEMONSTRATED is identical. R-multiples are the language pros use to talk about performance. Expectancy is also expressed in R. A strategy with +0.5R expectancy means each trade returns half a unit of risk on average. Over 100 trades, that's +50R total. With 1% risk per trade, that's a 50% return.