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Risk/Reward Calculator — is this trade worth taking?
Risk-to-reward from entry, stop, and target — plus the minimum win rate needed to break even (before costs). For planning only — not financial advice.
Quick answer
A solid starting point is at least 1:2 — twice as much potential reward as risk per share. Example: risk $100 to make $200 → 1:2. Roughly, you could be wrong on two out of three trades and still be near break-even before fees — if outcomes match the plan (they often do not exactly).
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Entry, stop, and targets — updated for the watchlist.
Definition
Per share: Risk = |Entry − Stop|, Reward = |Target − Entry|. We show the ratio as 1 : (Reward ÷ Risk) — dollars you can make per $1 risked at the plan.
R:R as 1:X → X = |Target − Entry| ÷ |Entry − Stop|
Result
Enter entry, stop, and target, then tap “Calculate risk/reward”.
When should you use it?
- •Screening setups before you pull the trigger.
- •Comparing two or more ideas with the same capital.
- •Building discipline to skip trades with poor payoff vs risk.
- •Seeing what win rate your strategy would need at a given R:R.
How it works
- 1
Enter your levels
Input entry, stop-loss, and profit target from your plan.
- 2
Calculate the ratio
Risk = |entry − stop|. Reward = |target − entry|. The label 1:X means X units of reward per 1 unit of risk (e.g. $5 risk and $10 reward → 1:2).
- 3
Evaluate the trade
At 1:2, break-even win rate is about 33.3% before costs. Higher X lowers the required win rate — if the target is realistic.
Example
Scenario: Long AAPL at $180.00, stop $174.00, target $195.00.
Math: Risk = $6.00/share. Reward = $15.00/share. Ratio = 1:2.5.
Result: Break-even win rate ≈ 28.6%. You only need to be right a bit more than 1 in 4 times (before costs) if outcomes match this plan — which is why many traders prefer 1:2+ setups.
Frequently asked questions
A common benchmark is 1:2 or better — $2 of potential reward for every $1 risked (per share). That does not make the trade a winner; it only describes payoff symmetry. Quality of setup, execution, and fees still matter.
Quick reference table
| R:R (1:X) | Breakeven win rate | Classification |
|---|---|---|
| 1:1 | 50.0% | Minimum |
| 1:2 | 33.3% | Good |
| 1:3 | 25.0% | Very good |
| 1:4 | 20.0% | Excellent |
| 1:5 | 16.7% | Outstanding |
Many traders aim for 1:2 or better. Improving payoff structure can help a marginal system — but execution, sample size, and costs still decide real results.
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Last updated: April 2026
FX13: AI Trading Signals offers free calculators and educational pages for traders and investors. Nothing here is personalized investment advice. Trading involves risk of loss. © 2026 Rakhimboy Rozmetov. FX13: AI Trading Signals
Operator: Rakhimboy Rozmetov. Questions? See Support.