Risk/Reward Ratio Calculator
Find your R:R and the win rate it demands
Your inputs
Risk/reward and the win rate it demands
A risk/reward ratio on its own means nothing. A 1:5 setup sounds excellent and is worthless if it fills 10% of the time. The number that matters is the pairing: every ratio implies a minimum win rate, and your job is to clear it.
R = reward per unit ÷ risk per unit
break-even win rate = 1 ÷ (1 + R)
expectancy (in R) = win rate × R − (1 − win rate)What each ratio actually requires
| Risk/Reward | Break-even win rate | What it feels like |
|---|---|---|
| 1 : 0.5 | 66.7% | Must win two out of three. Brutal. |
| 1 : 1 | 50.0% | A coin flip has to go your way more than half the time. |
| 1 : 2 | 33.3% | Lose two thirds of trades and still profit. |
| 1 : 3 | 25.0% | One winner in four is enough. |
| 1 : 5 | 16.7% | Long losing streaks are normal and survivable. |
This table explains why high-R:R trading feels so unpleasant. At 1:5 you are wrong more than eight times out of ten, and every instinct tells you the strategy is broken. It is not — but you need position sizing that lets you sit through the streak, which is what the position size calculator is for.
Expectancy is the real scoreboard
Expectancy tells you what one trade is worth on average, measured in units of risk. A 1:3 setup you win 40% of the time returns 0.4 × 3 − 0.6 = +0.6R per trade. Risk 1% per trade and that is roughly 0.6% of your account per trade, in expectation. Positive expectancy compounds; negative expectancy is a slow, mathematically certain drain no matter how good any individual trade feels.
What this calculator does not include
Fees and funding. Both push your true break-even away from entry, which quietly lowers your realised R below the number shown here — and the effect is largest on tight intraday setups where the round trip can eat a real share of a 1:1 trade. Run the numbers through the break-even calculator to see the net picture.
Frequently asked questions
What is a good risk/reward ratio?
There is no universally good ratio — there is only the ratio paired with the win rate it needs. A 1:1 setup needs to win more than 50% of the time. A 1:3 setup only needs 25%. High R:R strategies feel worse to trade because you lose most of the time, but they survive long losing streaks that would end a 1:1 strategy.
How do I calculate required win rate?
Required win rate = 1 / (1 + R), where R is your reward-to-risk ratio. At 1:2 that is 1 / 3 = 33.3%. This is the break-even point before fees — your actual edge has to clear this number plus trading costs, which is why very short-term high-frequency setups struggle.
Should I always aim for high R:R?
Not automatically. A 1:10 target that never gets hit is worth less than a 1:1.5 that fills reliably. The ratio only means something if the target is realistically reachable given the asset volatility and your holding period. Measure how often your targets actually fill before trusting a headline ratio.
Does R:R include fees and funding?
The raw ratio does not. Fees and funding push your real break-even further away, which quietly lowers your effective R:R. On a tight intraday setup the round-trip cost can eat a meaningful share of a 1:1 trade. Use the break-even calculator to see the true number.