Free trading calculator
Risk/reward calculator: is this trade worth taking?
Compares how far your take profit is with how far your stop loss is. It also shows the minimum share of trades you must win to not lose money over time.
For every 1 you risk, you aim to make 2.00. To break even over many trades you need to win at least 33% of them.
How to use the risk/reward calculator
- Choose Buy or Sell.
- Type your entry price, your stop loss price and your take profit price.
- Read the ratio. 1 : 2 means you aim to make twice what you risk.
- Check the break-even win rate. If you win fewer trades than that, the strategy loses money.
Example: a 1 : 2 trade
- Buy EUR/USD at 1.1000, stop at 1.0950 (50 pips), target 1.1100 (100 pips).
- Reward 100 ÷ risk 50 = 1 : 2.
- You break even if you win 1 trade in 3 (33%).
Common mistakes
- Moving the stop loss further away during the trade. That changes the ratio and the risk you sized for.
- Chasing a big ratio with an unrealistic target. A 1 : 5 target that is rarely hit is worse than a 1 : 1.5 that often is.
Questions
What is a good risk/reward ratio?
Many traders look for at least 1 : 1.5 or 1 : 2, but it only works together with your win rate. A high ratio with a low win rate can still lose.
How is the break-even win rate calculated?
Break-even win rate = 1 ÷ (1 + ratio). At 1 : 2 it is 1 ÷ 3 = 33%.
More free calculators
- Position size calculator
How many lots to open so a losing trade only costs what you planned.
- Pip value calculator
What one pip is worth in your currency for any lot size.
- Margin calculator
How much money your broker locks to open a trade with leverage.
- Profit and loss calculator
What you make or lose if price moves from A to B.
- Loss recovery calculator
Why big losses are hard to win back, and what a losing streak does.
Calculators are for education and planning. Results exclude spread, commission and swap, and brokers may use different contract sizes. Check your broker's contract specification before trading. Not investment advice.