This calculator works out your risk-reward ratio directly from your entry price, stop-loss, and take-profit levels, and shows the exact win rate you'd need just to break even at that ratio.
Enter your three price levels, and the calculator returns the ratio, the breakeven win rate, and a quick read on whether the setup is generally favourable.
This calculator is for educational purposes only and doesn't account for spreads, commissions, or slippage. It should not be considered financial advice.
There's no universal answer, but many traders target a minimum of 1:2 (risking R1 to potentially make R2), some strategies with high win rates can work with lower ratios like 1:1, while lower win-rate strategies typically need higher ratios like 1:3 or more to remain profitable overall.
They work together, a strategy with a lower win rate can still be profitable if its risk-reward ratio is high enough, and vice versa. This calculator's breakeven win rate figure shows exactly what win rate you'd need at your specific ratio just to break even, before any edge.
No, stop-loss and take-profit levels should primarily reflect genuine technical levels (support, resistance, volatility) on the chart, not be forced to fit an arbitrary ratio. Use this calculator to evaluate whether a setup identified through technical analysis also offers an acceptable risk-reward profile.
No, risk-reward ratio alone doesn't determine profitability, it must be combined with your actual win rate over a meaningful sample of trades. A strategy with an excellent risk-reward ratio but a very low win rate can still lose money overall.
Not automatically, a very high risk-reward ratio often comes with a correspondingly lower realistic win rate, the right balance depends on your specific strategy's actual statistics, not simply maximising the ratio itself.
No, risk-reward ratio must be considered alongside your actual win rate, a favourable ratio combined with an insufficient win rate can still produce a losing strategy overall, the two factors work together.
Most experienced traders let the trade setup itself (based on technical levels like support and resistance) determine a realistic stop and target, then calculate the resulting risk-reward ratio, rather than forcing an arbitrary predetermined ratio onto every setup.
Yes, if you adjust your stop-loss or take-profit level after entry (for example, trailing a stop), your effective risk-reward ratio for the remaining trade shifts accordingly from your original planned figure.
It can, if your strategy's genuine win rate is meaningfully above 50%, a 1:1 ratio can still be profitable, this is common in some higher-win-rate, mean-reversion style strategies, though less common in trend-following approaches.