⚖️ Risk/Reward Ratio Calculator
Enter an entry, a stop-loss, and a target price to see the per-share risk and reward, the reward-to-risk ratio, and the break-even win rate that ratio would require over many trades.
🧮 Compare Risk and Reward
What is a Risk/Reward Ratio Calculator?
It turns three prices — where you'd enter, where you'd cut the loss, and where you'd take profit — into a single comparison. The distance from entry to stop is the risk, the distance from entry to target is the reward, and the ratio between them summarises how much you'd stand to make versus lose on that specific idea. It also derives the break-even win rate the ratio implies.
Reward-to-risk is a common lens for studying trade structure, but a good ratio is not a promise: it says nothing about the odds of the target being reached. Everything here is pure arithmetic on the numbers you type, offered for learning — never as a signal to act.
❓ Frequently Asked Questions
How is the risk/reward ratio calculated?
The per-share risk is the distance between your entry and your stop-loss; the per-share reward is the distance between your entry and your target. The ratio divides reward by risk. A result of 3 means the potential reward is three times the amount at risk on that idea — it is a description of the numbers you entered, not a forecast.
What is the break-even win rate?
It's the long-run percentage of trades you would need to win for a given reward-to-risk ratio to break even before costs, computed as 1 ÷ (1 + ratio). At a 3:1 ratio that's 25%. It's an arithmetic reference point, not a prediction of how often any strategy will actually win.
Does a higher ratio mean a better trade?
Not necessarily. A favourable ratio says nothing about the probability of reaching the target, and win rate and ratio interact. This tool only reports the ratio and its break-even win rate; it makes no judgement about whether any trade is worth taking.
Is this financial advice?
No. This calculator is for educational and informational purposes only and offers no buy or sell recommendations. Trading involves substantial risk of loss; consult a licensed financial advisor before making decisions.