Free calculator
Risk to reward calculator: what a win pays against a loss.
Enter your entry, stop and target to see the ratio, the distances in pips and the win rate you need just to break even. Free and instant.
By the verify.trading team · Last reviewed · How we write
1:3.00
risk to reward
Risk
30.0 pips
Reward
90.0 pips
Distance
0.00300
Break-even
25.0%
Break-even rate is before spread and commissions.
The maths
Ratio = reward distance / risk distance
Formula
R:R = |Target - Entry| / |Entry - Stop| Break-even win rate = 1 / (1 + R:R)
Worked example
- Long EUR/USD. Entry 1.0850, stop 1.0820, target 1.0940.
- Risk = 30 pips. Reward = 90 pips. Ratio = 90 / 30 = 1:3.
- Break-even win rate = 1 / (1 + 3) = 25% before spread and commission.
- At 1:1 you would need to win 50% of trades just to break even.
What is a good risk to reward ratio?
It depends on how often your strategy wins. A ratio of 1:2 needs to win a little over a third of trades to break even before costs, while 1:1 needs more than half. Costs push both figures up.
How do I calculate risk to reward?
Divide the distance from entry to target by the distance from entry to stop. Entry 1.0850, stop 1.0820 and target 1.0940 is 90 pips of reward for 30 pips of risk, a ratio of 1:3.
Does a high ratio mean a good trade?
No. A distant target can be unlikely to be reached. The ratio only tells you what a win pays against a loss, not how likely the win is.
Do I include spread in the calculation?
You should. Spread widens your effective risk and narrows your effective reward, so on tight stops it can change the ratio noticeably.
Size it, then check who you are trading with
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