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
Before using the number
Use the calculation before comparing strategies
Compare verified forex copy trading strategies with verified performance, broker setup notes, drawdown context, and risk controls before connecting capital.