Risk/Reward Calculator
Evaluate any trade setup objectively — know your R:R ratio before you enter.
Pips risked is approximate, for 4-decimal pairs (e.g. EUR/USD). Adjust for JPY pairs (2-decimal).
How to use the risk/reward calculator
The risk reward calculator gives you an objective read on any trade setup before you commit capital. Enter your entry price, stop loss price, and take profit price and the tool returns your R:R ratio alongside the pip distances for each leg of the trade. This makes it straightforward to filter out setups that do not meet your minimum risk-to-reward criteria.
The R:R ratio compares how much you stand to lose against how much you stand to gain. A ratio of 1:2 means you are risking one unit of money to potentially make two. Most experienced traders require at least a 1:2 ratio before entering a trade, because it means you can be wrong on roughly one in three trades and still come out ahead.
Entry price, stop loss, and take profit are directly connected. Moving your stop loss tighter improves the ratio but increases the chance of being stopped out by normal market noise. Moving your take profit further away improves the ratio but lowers the probability the price reaches your target. Use this calculator to find the balance that fits your strategy and instrument.
Frequently asked questions
What is a good risk to reward ratio?
Most traders target a minimum risk-to-reward ratio of 1:2, meaning the potential profit is at least twice the potential loss. Higher ratios such as 1:3 or 1:4 allow you to remain profitable even with a win rate well below 50%.
How do I calculate risk to reward ratio?
Subtract your entry price from your stop loss to get the risk distance. Subtract your entry price from your take profit to get the reward distance. Divide the reward distance by the risk distance to get the R:R ratio. This calculator does all three steps instantly.
What is the difference between risk and reward in trading?
Risk is the maximum you stand to lose if the trade hits your stop loss. Reward is the amount you stand to gain if the trade reaches your take profit. Comparing both figures before entering a trade keeps decision-making objective rather than emotional.
Should I always aim for a 1:2 risk reward ratio?
The 1:2 minimum is a widely used guideline but the right ratio depends on your strategy's win rate. A high-probability system with a 70%+ win rate can be profitable at 1:1. A lower win rate strategy generally needs a higher reward ratio to stay net positive over a large sample of trades.
How does risk reward ratio affect my win rate requirements?
The two are mathematically linked. At a 1:1 ratio you need to win more than 50% of trades to be profitable. At 1:2 you only need to win roughly 34%. At 1:3 you only need around 25%. Higher reward ratios lower the minimum win rate needed to break even, which gives your strategy more room to work.