Risk-Reward Calculator

Set a target worth the risk. Enter your entry, stop-loss, and target price to calculate your R:R ratio and the minimum win rate you need to break even.

Learn: What is an R-Multiple? →

Your Trade Setup

Enter prices for the trade you are planning.

Price at which you plan to enter the trade

Price at which you will exit if the trade moves against you

Your profit target price for this trade

Your R:R Ratio

Risk-Reward Ratio 2.0:1
Break-Even Win Rate
33.3%
Risk per Share
₹5.00
Reward per Share
₹10.00

Strong setup — you earn ₹10.00 for every ₹5.00 risked. You only need to win 33.3% of trades to break even.

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Formula

R:R = (Target − Entry) ÷ (Entry − Stop Loss)

Risk is the absolute difference between your entry price and stop-loss price. Reward is the absolute difference between your target price and entry price. A ratio of 2:1 means you stand to gain twice what you risk on the trade.

Worked Example

Equity trade setup

Inputs

Entry Price
₹250
Stop-Loss
₹245
Target
₹260

Outputs

Risk per Share
₹5
Reward per Share
₹10
R:R Ratio
2:1
Break-Even Win Rate
33.3%

You risk ₹5 to make ₹10. At this 2:1 ratio you only need to win 33.3% of trades to break even — meaning 34 out of 100 trades winning is enough.

Common Mistakes

  • Setting targets before defining the stop-loss — the R:R ratio is only meaningful relative to your actual risk.
  • Treating a high R:R ratio as sufficient justification for a trade — win rate also matters.
  • Using tight stops to inflate the R:R ratio on paper, then widening them after entry.
  • Ignoring the break-even win rate — a 5:1 target is useless if your win rate is 10%.
  • Confusing R:R with expectancy — they're related but expectancy accounts for actual win rate.

Related Calculators

Expectancy Calculator Position Size Calculator Risk Of Ruin Calculator

Frequently Asked Questions

What R:R ratio should I target? +

Most systematic traders aim for at least 1.5:1 or 2:1. The right ratio depends on your win rate — a 60% win rate system can be profitable at 1:1, while a 30% win rate system needs at least 2:1 or higher.

Does a high R:R guarantee profit? +

No. A 5:1 R:R is worthless if your win rate is too low. Use the break-even win rate shown by this calculator to check if your actual win rate is above the threshold for profitability.

How does R:R relate to expectancy? +

Expectancy = (Win Rate × Average R) − (Loss Rate × 1R). Your R:R ratio is the average R on winning trades. Plugging your R:R into the expectancy formula tells you whether the system has positive expectancy.

Should I always use a fixed R:R? +

Not necessarily. Some setups justify wider targets, others warrant tighter ones. What matters is that your average R:R across all trades combines with your win rate to produce positive expectancy.

Educational tool only. Tracktions is a trade-journaling and analytics tool, not investment advice — we are not SEBI-registered advisers and do not provide trade recommendations or assurances of returns. Every result is based solely on the numbers you enter; confirm your historical data before drawing conclusions.