Risk Reward Ratio Calculator: R:R and Break-Even Win Rate
A risk reward calculator compares what a trade loses at the stop with what it gains at the target. It also shows the minimum win rate at which that ratio breaks even over many trades.
- Risk to reward
- 1:2.00
- Break-even win rate
- 33.3%
- Risk
- -5.00%
- Reward
- 10.00%
How it is calculated
- Long: risk = (entry − stop) ÷ entry, reward = (target − entry) ÷ entry
- Short: risk = (stop − entry) ÷ entry, reward = (entry − target) ÷ entry
- R:R = reward ÷ risk
- Break-even win rate = 1 ÷ (1 + R:R)
Frequently asked questions
- What is a good risk reward ratio?
- Many traders look for at least 1:2, risking $1 to make $2, which breaks even at a 33.3% win rate. A higher ratio needs fewer winners, but distant targets are hit less often.
- How is the break-even win rate calculated?
- With a ratio of R, each win earns R times what each loss costs, so you break even when win rate × R equals 1 − win rate. Solving gives 1 ÷ (1 + R), before fees.