Risk/Reward Ratio Calculator
Enter your entry, stop-loss, and target prices to get the risk/reward ratio, the breakeven win rate, and your total money at risk for long or short trades.
Add the number of shares or units to see your total money at risk and potential reward.
Frequently Asked Questions
What is a good risk/reward ratio?
It depends on your strategy, but many traders look for at least 1:2 — risking one unit to potentially make two. A higher reward relative to risk means you can be profitable even with a lower win rate.
What win rate do I need to be profitable?
The calculator shows your breakeven win rate — the minimum percentage of trades you must win at this ratio just to break even. Win more often than that and the strategy is profitable over time.
Does it support short trades?
Yes. Toggle to Short and the tool validates that your stop-loss sits above the entry and your target sits below it, then computes risk, reward, and the ratio the same way.
Understanding the Risk/Reward Ratio Calculator
The Risk/Reward Ratio Calculator helps traders size up a trade before they take it. Enter your planned entry price, stop-loss, and target (take-profit), pick long or short, and it instantly shows the risk/reward ratio expressed as 1 : X, along with the breakeven win rate — the minimum percentage of trades you must win at that ratio just to break even. Add an optional position size or share count and it also converts the per-unit numbers into the actual money you stand to lose or gain. Everything runs in your browser, adapts to your chosen currency, and never leaves your device, making it a fast sanity check for any setup.
How it works
For a long trade your risk per unit is the distance from entry down to your stop-loss, and your reward is the distance from entry up to your target; for a short trade the roles flip. The tool takes the absolute gap on each side, so risk = |entry − stop| and reward = |target − entry|. Dividing reward by risk gives the ratio, displayed as 1 : X so a 1 : 2 setup means you risk one unit to make two. The breakeven win rate is risk ÷ (risk + reward), the win percentage at which gains and losses cancel out. If you supply a position size, each per-unit figure is multiplied by it to show total money at risk and potential gain.
Worked example
Suppose you go long on a stock at an entry of 100, set a stop-loss at 95, and a target of 115. Risk per share is 100 − 95 = 5, and reward is 115 − 100 = 15, giving a ratio of 1 : 3. The breakeven win rate is 5 ÷ (5 + 15) = 25%, so you only need to win one in four trades to break even. With a position of 100 shares, your total risk is 500 and your potential gain is 1,500 in your selected currency.
Tips & common mistakes
- Aim for a ratio of at least 1:2 so a single winner can cover two losing trades.
- Set your stop-loss at a technically meaningful level (support, resistance, or a recent swing) rather than picking the ratio first and forcing the stop to fit.
- Compare the breakeven win rate to your real historical win rate — if you rarely beat it, the setup is not worth taking.
- A great ratio means nothing if your stop is so tight it gets hit by normal noise; give the trade room to work.
- For short trades, remember the stop sits above entry and the target below it — the calculator validates this for you.
- Use the position-size field to keep each trade's money risk to a small, fixed fraction (e.g. 1–2%) of your account.
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Reviewed by the TopOpenTools editorial team · Last updated June 2026. These tools provide general estimates for educational purposes only and are not financial, tax, insurance, investment, or medical advice. Verify important decisions with a qualified professional.