Risk-to-Reward Ratio Calculator
Result
Trade Type: -
Risk: -
Reward: -
Risk-to-Reward Ratio: -
📘 Understanding Risk-to-Reward Ratio (RRR)
The Risk-to-Reward Ratio (R:R) helps traders measure how much profit (reward) they can make for every unit of risk taken on a trade. It’s a crucial tool for managing risk and improving long-term consistency.
🧮 Formula
For Long Trades:
Risk = Entry Price - Stop Loss
Reward = Target Price - Entry Price
R:R = Reward / Risk
For Short Trades:
Risk = Stop Loss - Entry Price
Reward = Entry Price - Target Price
R:R = Reward / Risk
📊 Example
If Entry = 10, Stop Loss = 8, Target = 15 →
Risk = 2 | Reward = 5 | R:R = 2.5 : 1
✅ This means for every 1 unit of risk, you can gain 2.5 units.
💡 Why It Matters
✔ Helps you avoid poor setups.
✔ Keeps your losses small and gains large.
✔ Builds long-term consistency.
✔ Brings discipline to your trading plan.
⚙️ About This Calculator
Our calculator instantly identifies whether your trade setup is Good (R:R ≥ 2), Moderate (1–2), or Poor (R:R < 1). It supports both long and short trades across all markets — stocks, crypto, forex, or indices.