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Reward-to-Risk Calculator

Turn an entry, stop and target into a reward-to-risk ratio and the breakeven win rate the trade demands.

Quick answer: The reward-to-risk calculator compares what a trade can gain against what it can lose, using your entry, stop and target. It computes the risk as the distance from entry to stop, the reward as the distance from entry to target, and expresses the two as a ratio of the form 1 : R. It also converts that ratio into the breakeven win rate — the fraction of such trades you must win merely to break even before costs — which shows why a favourable ratio lowers the accuracy you need to survive.

Entry priceStop priceTarget price

How to use it

Enter the entry, stop and target prices for the trade. The tool reports the risk and reward per unit in points, the reward-to-risk ratio as 1 : R, and the breakeven win rate implied by that ratio. Use it to sanity-check a plan before entry: a trade that only offers 1 : 0.7 needs a high win rate just to stay level. The prices are in the same units, and the figures exclude brokerage, STT and slippage, which raise the win rate you truly need.

Formula

Risk = |Entry − Stop| ; Reward = |Target − Entry| ; Reward-to-risk = Reward ÷ Risk ; Breakeven win% = 1 ÷ (1 + Reward-to-risk) × 100

Risk and Reward are price distances in points; the ratio is a pure number shown as 1 : R. The breakeven win rate is the fraction of identical trades you must win to net zero before costs — equivalently Risk ÷ (Risk + Reward) × 100. It ignores costs, which push the real breakeven higher.

Frequently asked questions

How does reward-to-risk connect to survival?

A higher ratio lowers the win rate you must sustain to break even, so it widens the margin for error. Combined with small position sizing, a favourable reward-to-risk means an ordinary run of losses is survivable rather than terminal.

What is the breakeven win rate?

It is the fraction of trades at a given reward-to-risk you must win just to net zero before costs. At 1 : 1 you need about 50 percent; at 1 : 2 only about 33 percent; at 1 : 0.5 you need about 67 percent. It shows the accuracy the ratio silently demands.

Is a higher reward-to-risk always better?

Not on its own. Stretching the target to inflate the ratio often lowers the probability of actually reaching it, so a great ratio you rarely hit can be worse than a modest ratio you hit often. Judge the ratio together with a realistic estimate of the win rate.

Does this ratio predict whether the trade will work?

No. It only describes the geometry of the plan — how much you can win versus lose and the win rate that implies. It says nothing about the probability of the target being reached, which depends on the market, not the calculator.

Should the stop and target be based on price structure or a fixed ratio?

Place the stop where the trade idea is proven wrong and the target where the move is realistically exhausted, then read off the ratio. Setting a stop merely to manufacture a tidy ratio puts it at an arbitrary price and undermines the risk logic.

Are costs included in the breakeven win rate?

No. Brokerage, STT, exchange fees and slippage all raise the real breakeven win rate above the figure shown, so treat the output as an optimistic floor and keep some cushion.

Runs entirely in your browser — no data leaves your device. Illustrative and educational only; real-world charges and market conditions apply in practice.