Risk/Reward Ratio Calculator

See the risk/reward ratio for any trade in seconds. Enter your entry, stop-loss, and target, and the calculator shows your ratio, the win rate you would need just to break even, and how much is at risk and at stake.

How the risk/reward ratio works

The risk/reward ratio compares what you could lose with what you could gain on a trade. It is the foundation of disciplined trading, because it tells you whether a trade is worth taking before you place it.

• Risk per share = the distance from your entry to your stop-loss. Example: entry $100, stop $95 = $5 of risk.
• Reward per share = the distance from your entry to your target. Example: entry $100, target $110 = $10 of reward.
• Risk/reward ratio = reward divided by risk. Here, $10 / $5 = a 1:2 ratio.

Risk/reward and your win rate

A better ratio means each winning trade pays for more losing trades. The breakeven win rate is the percentage of trades you would need to win just to break even at a given ratio. At 1:1 you need to win 50% of the time; at 1:2, only about 33%; at 1:3, about 25%. That is why win rate alone can be misleading: a strategy that wins often but has a poor ratio can still lose money.

Risk/reward in copy trading

When you copy a trader, you inherit their risk/reward profile, so it is worth understanding before you follow them. Pair this with the position size calculator and the drawdown recovery calculator to size each trade to your account, and read how to choose a copy trading strategy and managing copy trading risk. With RelayTrades, your position-size and exposure limits are enforced server-side before any copied order is placed.