Risk/Reward Ratio Calculator
Calculate your risk-to-reward ratio from entry, stop-loss, and take-profit prices. See risk and reward amounts with a visual diagram.
For informational purposes only. Not financial advice. Calculations are estimates and may not reflect your exact situation. Consult a qualified financial adviser for personalised guidance.
About Risk/Reward Ratio Calculator
Know your risk before you enter a trade. This calculator takes your entry price, stop-loss, and take-profit levels, and shows you exactly how much you stand to gain versus how much you could lose.
How It Works
Enter your planned entry price, where you would cut your loss (stop-loss), and your profit target (take-profit). The calculator computes the risk amount, reward amount, and the ratio between them. It auto-detects whether you are trading long or short based on the stop-loss position relative to entry.
Reading the Visual Diagram
The colored bar shows your stop-loss in red and take-profit in green, with your entry in blue between them. The distances give you an intuitive sense of the trade's risk profile. A wider green zone relative to red means a more favorable setup. For calculating the actual profit after fees, use the Stock Profit Calculator or Crypto Profit Calculator.
Using R:R in Your Trading Plan
The risk-reward ratio is one piece of the puzzle. Combine it with your historical win rate to see whether a strategy is profitable over time. A 1:2 ratio with a 50% win rate is profitable. A 1:1 ratio needs above 50% to work. For options strategies with defined risk, the Options Profit Calculator shows max profit and max loss at different price levels. All calculations run in your browser.
Frequently Asked Questions
What is a risk-reward ratio?
The risk-reward ratio compares how much you stand to lose versus how much you could gain on a trade. If your risk is $5 and your potential reward is $15, your R:R ratio is 1:3. Higher ratios mean more potential reward relative to risk, which is generally preferred.
What is a good risk-reward ratio?
Many traders aim for at least 1:2 or 1:3. A 1:2 ratio means you could lose two trades for every winning trade and still break even. Even with a 40% win rate, a 1:3 ratio can be profitable. The right ratio depends on your trading strategy and win rate.
How does the calculator detect long vs short positions?
It automatically determines the position type based on where you place your stop-loss relative to entry. If the stop-loss is below entry, it is treated as a long position. If the stop-loss is above entry, it is a short position.
What is break-even percentage?
The break-even percentage shows how far the price needs to move from your entry to cover the distance to your stop-loss. It helps you understand how much room you are giving the trade before getting stopped out.
Should I always use a stop-loss?
Most experienced traders use stop-losses to manage risk. Without one, a single bad trade can wipe out many winning trades. The calculator helps you plan exact levels before entering a trade so you are not making emotional decisions in the moment.