Trade planning
Risk Reward Calculator
Check whether a trade has enough potential reward for the distance to the stop loss. The calculator also shows the break-even win rate before spreads, commissions, and slippage.
Trading involves risk. Calculator results are estimates based on the values you enter; spreads, commissions, swaps, slippage, contract specs, and broker execution can change the real outcome.
Risk Reward Calculator
Risk/reward ratio
1:3
Use this before the lot size calculator so the trade has a clear invalidation point and target.
Calculate position sizeWhat risk/reward tells you
Risk/reward compares the distance from entry to stop loss with the distance from entry to take profit. A 1:2 setup risks one unit to target two units. A 1:3 setup risks one unit to target three units.
The ratio is only useful if the stop and target are realistic. A random far-away target can make a trade look attractive on paper while still having little chance of being reached.
How break-even win rate changes
| Risk/reward | Break-even win rate before costs | Practical read |
|---|---|---|
| 1:1 | 50% | Costs can make this harder than it looks |
| 1:2 | 33.3% | One winner can cover two similar losers before costs |
| 1:3 | 25% | Lower win rate needed, but targets may take longer |
| 1:5 | 16.7% | Can fit trend trades, but failed breakouts can pile up |
When a good ratio is not enough
Risk/reward does not include spread, slippage, swaps, news volatility, or whether the setup appears often enough to matter. A trade can show 1:3 and still be poor if the stop is too tight for normal volatility.
Use the ratio as a filter, then check the chart context, session, instrument behavior, and your planned position size.
Related tools
Use the number before you compare strategies
A calculator cannot tell you whether a strategy is good. It helps you understand the size of the risk before you look at verified results, drawdown, broker conditions, and account fit.