Risk / Reward Calculator
See a trade's R:R ratio, the win rate you need to break even, and the expected value over 10, 25, 50, and 100 trades.
Input
Result
Risk : Reward
1 : 3.00
Risk Amount
$500
Reward Amount
$1,500
Breakeven Win Rate
25.0%
Your Win Rate
50%
Expected Value Per Trade
Profitable+$500.00
+1.00R per trade
Projected P&L at 50% Win Rate
Prop Firm Tip
A 1:3.0 R:R is excellent for prop firm challenges. You only need a 25% win rate to break even. Giving you a large margin for error.
What Is a Risk-Reward Ratio?
The risk-reward ratio compares what a trade stands to lose against what it stands to gain, measured from entry to stop-loss and from entry to target. A ratio of 1:2 means the target sits twice as far from entry as the stop does. It is set before entry by where those two levels are placed, and it determines what win rate the strategy needs in order to break even.
How the Ratio Is Calculated
Both legs are measured in the same unit, usually pips or price distance, so the ratio is independent of position size.
Risk-reward = (Target - Entry) / (Entry - Stop-loss)
Entering at 1.1000 with a stop at 1.0970 and a target at 1.1060 gives 30 pips of risk against 60 of reward, a ratio of 1:2. Position size does not appear in the calculation, because scaling the trade scales both legs equally. Size decides how much money is at stake; the ratio decides the shape of the outcome.
The Win Rate Each Ratio Requires
Every ratio implies a minimum win rate below which the strategy loses money over time.
Breakeven win rate = 1 / (1 + Reward-to-risk)
At 1:1 you need to win more than 50% of trades. At 1:2 you need more than 33.3%, and at 1:3 more than 25%. This is why a strategy that loses most of its trades can still be profitable, and why a high win rate at 1:0.5 can still lose money. The calculator above shows the figure for whatever levels you enter.
Risk-Reward on a Challenge Account
On a FundedFast challenge or funded account, both of which are simulated trading accounts, the maximum daily loss is 5% of your starting balance and the maximum total loss is 10% of your starting balance, raised to 20% where the drawdown add-on was purchased on an eligible account. The ratio does not change how much a single loss costs, only how much a win returns for it. What interacts with the loss limits is the risk leg: the distance to your stop, multiplied by position size, is what consumes the daily allowance regardless of how far away the target sits.
This section is educational information about how risk-reward ratios and loss limits interact on a simulated evaluation account. It is not financial advice and not a recommendation to use any particular ratio.
Risk-Reward Ratio FAQ
What is a good risk-reward ratio?
There is no universally correct ratio, because it trades off against win rate. A higher ratio needs fewer winners to break even but produces more losing trades in a row. What is arithmetic rather than opinion is the breakeven point each ratio implies: 1:1 needs above 50%, 1:2 above 33.3%, 1:3 above 25%.
How do you calculate risk-reward?
Measure the distance from entry to stop-loss, and from entry to target, in the same unit. Divide the second by the first. Entry 1.1000, stop 1.0970 and target 1.1060 gives 30 against 60, which is 1:2.
What win rate do I need for a 1:2 ratio?
More than 33.3% before costs. That is the breakeven point, so anything above it is profitable over a large enough sample, and spread and commission push the real figure slightly higher.
Is a higher risk-reward ratio always better?
Not automatically. Pushing the target further raises the ratio but lowers the chance of reaching it, and produces longer losing streaks. A ratio only helps if the target remains realistic for the setup rather than being placed to make the number look good.
Does the ratio depend on position size?
No. Both legs are measured in the same unit, so scaling the position scales risk and reward equally and the ratio is unchanged. Position size determines how much money is at stake; the ratio determines the shape of the outcome.
Should spread and commission be included?
They should be considered, because both are paid regardless of outcome and both effectively widen the risk leg while shortening the reward leg. The tighter the stop, the larger the proportion they represent, so short-term strategies feel the effect more than longer-horizon ones.
How does risk-reward affect a prop firm challenge?
Only through the risk leg. The daily loss limit is consumed by stop distance multiplied by position size, and the target has no bearing on that. A wide target does not make a trade safer; it changes what a win returns, not what a loss costs.
Is this risk-reward calculator free?
Yes. It is free and does not require an account. Nothing you enter is stored or sent anywhere; the calculation runs entirely in your browser.
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