Risk to Reward Calculator
Visual Setup Planner
R:R Ratio
Required Win Rate
0%
Target Distance
0.00000
Visual Reward/Risk Mapping
Other Useful Tools
How the Risk to Reward Calculator Works
Understanding your Risk to Reward ratio is vital for long-term profitability. This tool calculates the balance between your potential profit and potential loss.
The Formula
Practical Example
Frequently Asked Questions
1. What is a 'Good' Risk to Reward ratio?
Most professional traders aim for at least a 1:2 ratio. This allows you to stay profitable even if you win only 40% of your trades.
2. How does R:R affect my Win Rate requirements?
At a 1:1 ratio, you need >50% win rate. At 1:2, you only need >33.33%. Our calculator shows you exactly what your 'Breakeven Win Rate' is.
3. Why should I calculate R:R before entering a trade?
It removes emotion. If a setup looks good but the R:R is poor, it's mathematically a bad bet over the long run.
4. Is a higher R:R always better?
Not necessarily. A 1:10 ratio might significantly lower your Win Rate. The key is to find a 'Sweet Spot' for your strategy.
5. Can I use this for Prop Firm evaluations?
Yes! Using a consistent R:R is the best way to prove you have a disciplined risk management plan to prop firms.
6. Does this calculator work for all assets?
Yes! Whether you trade Forex, Gold, or Oil, the R:R ratio calculation remains the same as it is based on the price distance between your entry, stop loss, and target.
7. How is the 'Distance' calculated for Gold vs Forex?
For Gold (XAU/USD), a 10.00 move is often called 1000 points. For Forex (e.g., EUR/USD, GBP/USD), we show the raw price difference (e.g., 0.00150) to ensure 5-decimal precision for all currency pairs.
8. How does the tool detect Buy or Sell?
The tool compares your Entry price with your Stop Loss. If SL is below Entry, it identifies a Buy (Long) setup. If SL is above, it's a Sell (Short) setup.