Free Trading Tool
Risk-Reward Ratio Calculator
Enter your entry price, stop loss, and target price to instantly calculate your risk-reward ratio and the minimum win rate you need to break even. No signup required.
Your Result
Risk-Reward Ratio
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Break-Even Win Rate
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Minimum win rate this setup needs just to break even.
Risk
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Reward
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Always paper trade first. This calculator is an analytical tool to help you evaluate a trade setup before you risk capital — it is not investment advice and does not guarantee results. Test any strategy on a paper account before trading it live.
Want the full definition, worked examples, and common mistakes? Read the full definition and worked examples →
How to Calculate Risk-Reward Ratio
The risk-reward ratio compares how much you stand to lose against how much you stand to gain on a trade, using three numbers you already have before you place the trade:
- 1. Entry price — where you plan to enter the trade.
- 2. Stop loss price — the level that invalidates your setup and exits you at a defined loss.
- 3. Target price — your realistic profit target.
Risk = |Entry Price − Stop Loss Price|
Reward = |Target Price − Entry Price|
Risk-Reward Ratio = Risk : RewardWorked example: (illustrative, not real market data) — a trader enters a long position at 100, sets a stop at 95, and targets 115.
- Risk = 100 − 95 = 5
- Reward = 115 − 100 = 15
- Risk-Reward Ratio = 5:15 = 1:3
A 1:3 ratio means the trader is risking 1 unit to make 3 — this position only needs to win 25% of the time to break even (see the break-even formula below).
Risk-Reward Ratio Formula
Break-Even Win Rate = 1 / (1 + R:R multiple)| Risk-Reward Ratio | Minimum Win Rate to Break Even |
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| 1:1 | 50% |
| 1:1.5 | 40% |
| 1:2 | 33% |
| 1:3 | 25% |
| 1:5 | 17% |
This is the formula the calculator above runs automatically — but understanding it matters more than the number itself: a favorable R:R ratio lets a strategy stay profitable even when it's wrong more often than it's right.
Risk-Reward Ratio in Trading — Why It Matters
Risk-reward ratio only has value as a pre-trade filter, not a post-trade label. Calculating it before you enter — and rejecting trades that fall below your minimum threshold — is what turns it from a statistic into a discipline. Most systematic traders use 1:1.5 as a floor and prefer 1:2 or better.
Common mistake: moving your stop loss further away mid-trade to "give it more room." This silently destroys the R:R you calculated at entry and defeats the purpose of calculating it in the first place. If the stop was placed correctly to begin with, it should not move.
How Quantzee Helps
Quantzee's indicators (see the AI Adaptive Quant Toolkit and SuperTrend Pro+) mark defined entry zones alongside invalidation (stop) and projected target levels directly on the chart — giving you the two numbers this calculator needs before you size a position, not after. Because Quantzee signals are non-repainting, the R:R you calculate at the moment of entry is the R:R that was genuinely available, not one that shifted retroactively on the historical bar.
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