Free tool · Trade planning

Risk:reward calculator

Plan a trade before you take it. See your reward to risk, the win rate you need to break even, and the expected value of the setup.

Your trade plan

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Fees are applied on entry and exit, so the ratio shown is net of costs. For education and risk planning only. Not financial advice or a buy or sell signal.

How the risk:reward ratio works

The ratio compares what you stand to gain with what you stand to lose. A trade that risks 1 to make 3 only needs to win one time in four to break even. Reward to risk and win rate always work together.

Reward : risk = Net profit per coin / Net loss per coin
Break-even win rate = 1 / (1 + Reward : risk)
Expected value (in R) = Win rate x R – (1 – Win rate)

A good ratio is not enough

A 3:1 target that is rarely reached loses money. Judge a setup by the ratio and by how often it really works, which a trade journal shows over many trades.

What is R?

1R is the amount you risk on a trade. A win of 2R pays twice what you risk. Thinking in R lets you compare trades of different sizes.

Place the stop first

Choose your stop where the idea is proven wrong, then see if a realistic target gives a worthwhile ratio. Do not squeeze the stop to improve the number. Read our stop-loss guide.

Pro · Coming soon

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