How do I calculate a risk/reward ratio?

Risk/reward = (Take profit − Entry) ÷ (Entry − Stop loss). A trader risking 25 points to make 50 points is risking 2:1 in their favor — an R:R of 2.

What win rate do I need to break even?

Required win rate = 1 ÷ (1 + R:R). At 1:1 you need 50% wins. At 2:1 you only need ~33%. At 0.5:1 you need ~67% — which is why low R:R trading is so hard to stay profitable with.

What R:R ratio is good?

Aim for at least 1.5:1. The best traders usually combine a reasonable R:R with a real edge — and they verify it in their journal, not their feelings.

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Risk/Reward Calculator — know your R:R before you enter

Put in your entry, stop loss and take profit. Instantly see your risk/reward ratio and the exact win rate you need to break even.

Risk/Reward Calculator

Entry Price

Stop Loss Price

Take Profit Price

Risk Amount (USD, optional)requires the risk/reward to be above 0

Risk / Reward

Updates live as you type.

DirectionLong

You risk0.01 (per unit)

You could gain0.01 (per unit)

R:R ratio1 : 2.00

Required win rate to break even33%

Potential profit (at your risk)$200.00

Why the R:R ratio decides your edge

Example: you enter at 1.1000, stop at 1.0950 (50 pips risk), target at 1.1100 (100 pips reward). Your R:R is 2 : 1 — with that ratio you only need to win 33% of your trades to break even.

Too many traders focus only on win rate. A 90% win rate means nothing if you lose 10x more on losers than you make on winners. The real metric is expectancy: average win × win rate − average loss × loss rate.

CoreTrade calculates your real expectancy automatically from every logged trade — including your average R:R, win rate by session and profit by instrument.

How to read your R:R before you enter

Enter your planned entry price, as a number or straight from your chart.
Enter your stop loss price — where your idea is proven wrong, not where you feel comfortable.
Enter your take profit price, based on the next real structure level rather than an arbitrary target.
Read the R:R ratio; aim for at least 1.5:1 unless your win rate is genuinely high.
Compare the break-even win rate with your journal — if your real win rate is lower, the trade has negative expectancy.

Do I include spreads and commissions in R:R?

Strictly speaking, yes — subtract the spread and commission from your reward before comparing. CoreTrade lets you log the exact P&L of every trade, so your analytics are always net of costs.

Is a higher R:R always better?

No. A very high R:R usually means a very wide take profit that rarely gets hit. What matters is the combination of R:R and win rate that produces a positive expectancy over many trades.

How is R:R different from win rate?

Win rate shows how often you win. R:R shows how much you win when you win compared to how much you lose when you lose. A profitable system needs a positive balance between the two — that's expectancy.

What is expectancy and why does it matter?

Expectancy is the average amount you win or lose per trade: (win rate × average win) − (loss rate × average loss). A positive expectancy over hundreds of trades is what makes a strategy profitable — not any single result.

Should I move my stop loss to break even?

Moving a stop to break even reduces the R you actually realise and can get you stopped out of valid trades. If you do it, log the real exit in your journal so your analytics reflect what happened, not the plan.

How do I improve my R:R?

Enter at better prices (pullbacks rather than breakouts), use a tighter but technically valid stop, and target a realistic level with room to run. Improving entry quality usually raises R:R more than widening targets.

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R:R assumes the full stop loss distance is the risk. Check that your broker's spread and slippage don't push your actual breakeven win rate higher.

Your win rate is a number. Your edge is a curve.

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