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Risk/Reward Calculator
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Understanding Risk/Reward Ratios
What is R:R Ratio?
The risk/reward ratio compares how much you stand to lose versus how much you stand to gain on a trade. A 1:2 ratio means you risk $1 to potentially make $2.
What is Breakeven Win Rate?
The minimum win rate you need to break even at a given R:R ratio. With a 1:2 R:R, you only need to win 33.3% of trades to break even.
R:R Ratio Benchmarks
1:0.5Poor — Need 66.7% win rate. Risking more than potential reward.
1:1Neutral — Need 50% win rate to break even.
1:2Good — Only need 33.3% win rate. Minimum target for most strategies.
1:3+Excellent — Only need 25% win rate. Ideal for swing trading.