Risk : Reward Calculator
Find the breakeven win rate for any setup.
Enter your entry, stop, and target. This tool returns your risk-to-reward ratio and — more importantly — the win rate you need to break even. Most retail traders have never run this math, which is why they lose money even with charts that look right.
Risk $0.00500 points to make $0.01500 points.
With this R:R you need to win 25.0% of trades to break even. Anything above that is profit. A 1:2 setup only needs a 33.3% win rate. A 1:3 setup only needs 25%. This is why letting winners run matters more than picking direction.
What it is
Risk-to-reward (R:R) is the ratio of what you're risking to what you stand to make. A 1:2 R:R means you risk $1 to make $2. The breakeven win rate is the percentage of trades you need to win to end up flat — any win rate above that number is profit. This calculator runs both numbers from the three inputs every trader already uses: entry, stop, and target.
When to use it
Before every trade, without exception. A setup you can't describe in 'risk X to make Y' terms isn't a setup — it's a guess. Running this math also helps you walk away from bad setups. If the best-case target only gives you 0.8R on a clean stop, it's not worth taking.
The formula
R:R ratio = |Target − Entry| ÷ |Entry − Stop| Breakeven win rate = 1 ÷ (1 + R:R) Examples: 1:1 R:R → need 50.0% win rate to break even 1:2 R:R → need 33.3% win rate 1:3 R:R → need 25.0% win rate 1:5 R:R → need 16.7% win rate The higher your R:R, the lower your required win rate.
How to use it
- 1. Pick direction based on your bias
Long if you expect price to rise above entry. Short if you expect it to fall. The calculator validates that your stop and target match the direction.
- 2. Enter your entry price
This is where you'll get in. For limit orders, use the limit price. For market orders, use the current price.
- 3. Place your stop at the invalidation level
Your stop goes where the trade idea fails — below structure for a long, above structure for a short. Never use a random dollar amount for stop placement.
- 4. Place your target at a realistic level
Prior support/resistance, a prior swing, a trendline — not a dream number. The R:R math is only useful if the target is actually reachable.
- 5. Read the breakeven win rate and decide
If you need a 50% win rate to break even on a 1:1 setup, ask: have you proven you hit that on this type of setup? If yes, take it. If no, skip.
Common mistakes
- ✗Taking trades with worse than 1:1.5 R:R. If you risk $100 to make $100, you need to win more than 50% just to break even — and most retail traders don't hit 50% consistently.
- ✗Moving the stop to 'improve' the R:R. If you move your stop closer to entry without a structural reason, you're not improving the setup, you're just increasing the probability of a stop-out.
- ✗Picking targets that never actually get hit. A 1:10 R:R on paper means nothing if the target is 300 pips away and price reverses after 30.
- ✗Forgetting to include spread in the stop distance. A 10-pip stop with a 1-pip spread is really an 11-pip stop — that matters at scale.