What Is an R-Multiple? The Number That Makes Trades Comparable
R is what you risk on a trade. An R-multiple expresses profit or loss as a multiple of that risk, so a small and a large trade can be compared on the same scale.
R is the amount you risk on a trade — the distance from your entry to your stop-loss, multiplied by your position size. An R-multiple expresses the result of a trade as a multiple of that initial risk.
R-multiple = profit or loss ÷ initial risk (1R)
Why it matters
Rupee P&L is misleading because trades risk different amounts. R-multiples normalise that: a +2R trade made twice your risk, whether you risked ₹500 or ₹5,000. It lets you compare trades, setups, and months on one scale.
A worked example
You buy at ₹100 with a stop at ₹95, so your risk per share (1R) is ₹5. You size 200 shares, making 1R = ₹1,000.
| Exit price | P&L | R-multiple |
|---|---|---|
| ₹110 | +₹2,000 | +2R |
| ₹105 | +₹1,000 | +1R |
| ₹95 (stop hit) | −₹1,000 | −1R |
| ₹90 (slippage) | −₹2,000 | −2R |
How traders use R
- Expectancy — your average R per trade. Positive expectancy means the system makes money over many trades.
- Risk control — capping risk at 1R per trade keeps any single loss survivable.
- Honest review — "+40R this quarter" says more about skill than a rupee figure that depends on account size.
To see how your risk per trade converts into a share or lot count, use the position size calculator.
Educational content only. Tracktions is a trade-journaling and analytics tool, not investment advice — we are not SEBI-registered advisers and do not provide trade recommendations, tips, or assurances of returns.