Risk Reward Ratio Calculator
A setup is not good or bad on its own — it is good or bad relative to what you risk to take it. Enter entry, stop loss and target to see your risk-reward ratio and, more usefully, the exact win rate that ratio needs before it starts making money.
Free to use — no sign up required
Also searched as: R multiple calculator, risk reward ratio calculator, breakeven win rate calculator, stop loss and target calculator, trade R:R calculator
At 1:2.00 you need to win more than 33.3% of these trades to make money before charges. If your actual win rate on this setup is below that, the setup loses money no matter how disciplined you are about taking it.
What is the risk reward ratio?
The risk reward ratio compares what a trade can lose against what it can make. If you risk ₹30 a share to target ₹60, that is a 1:2 setup — two rupees of upside for every rupee at stake.
On its own the ratio proves nothing. A 1:5 setup that only works one time in ten still loses money. What the ratio actually fixes is the win rate you need, and that is the number worth knowing before you click buy.
How to use this risk reward calculator
- Pick the direction — long or short. The calculator flags prices that contradict it.
- Enter your entry price.
- Enter the stop loss where your trade idea is proven wrong, not where the loss stops feeling comfortable.
- Enter your target at a level the chart can realistically reach — prior resistance, a measured move, an ATR multiple.
- Enter quantity to convert the ratio into actual rupees at risk and rupees on offer.
How risk reward works
Risk:Reward = (Target − Entry) ÷ (Entry − Stop loss) Breakeven win rate = 1 ÷ (1 + Reward:Risk) × 100A ratio on its own says nothing about whether a setup makes money. What it does is fix the win rate you need. That is the number worth knowing before you take the trade, and the one almost nobody calculates.
Breakeven win rate by ratio
| Risk : Reward | Win rate needed |
|---|---|
| 1 : 0.5 | 66.7% |
| 1 : 1 | 50.0% |
| 1 : 1.5 | 40.0% |
| 1 : 2 | 33.3% |
| 1 : 3 | 25.0% |
| 1 : 5 | 16.7% |
What an R-multiple is
R is your initial risk in rupees — the distance from entry to stop. Expressing results in R lets you compare a ₹500 Nifty trade and a ₹50,000 equity trade on one scale. A trade that makes three times what it risked is +3R; a stop-out is −1R. Track R across a hundred trades and you can see your edge without the rupee amounts distorting the picture.
Why the ratio alone can mislead you
It is easy to manufacture a beautiful 1:5 setup by placing the stop absurdly tight — and then get stopped out by normal noise on nearly every trade. The stop has to sit where the trade idea is actually wrong, not where the ratio looks best. A realistic 1:1.5 that fits the chart beats a fantasy 1:5 that never survives the first five minutes.
Frequently asked questions
There is no universally good ratio — it only matters alongside your win rate. A 1:1 setup needs to win more than 50% of the time; a 1:3 setup only needs about 25%. High-probability setups can justify a lower ratio, while breakout setups that fail often need a higher one.
A calculator tells you the plan. A journal tells you if you followed it.
TradeXJournal records every trade you take, tags the setup and the mistake, and shows you which of your setups actually make money. Free for 14 days, no card needed.
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Browse all free trading toolsThese calculators are provided for information and education only. They are not investment, tax or financial advice. Charge rates and tax thresholds change — verify against your broker's contract note and a qualified professional before acting.