📈 Trading & Investing

Risk/Reward Calculator

Measure reward versus risk for a trade.

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Measure reward versus risk for a trade. This dedicated page is built for fast, clean calculations and search visibility.

Enter your values, click calculate, and see the result instantly. The page uses a simple, focused layout to improve usability on mobile and desktop.

How to use this calculator

  1. Open the risk/reward calculator page.
  2. Enter the required values in the form fields.
  3. Click Calculate to see the result and breakdown.
  4. Use the related links to explore similar tools.
Results are estimates. For lending, taxes, trading, nutrition, or medical decisions, verify with a qualified professional.

Risk/Reward Calculator

Measure reward versus risk for a trade.

Result
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    Understanding risk-to-reward ratio

    Risk-to-reward (R:R) ratio compares how much you can lose (distance to stop loss) versus how much you stand to gain (distance to target). A 1:2 R:R means risking ₹1 to make ₹2. This single number determines whether a trading strategy can be profitable even with a modest win rate.

    At 1:2 R:R, you only need to win 34% of trades to break even. At 1:3 R:R, you break even winning just 25% of trades. Most retail traders fail not because of bad win rates, but because they take trades with 1:1 or worse R:R while expecting to win consistently.

    Win rate vs. R:R — the tradeoff

    • 1:1 R:R: Requires over 50% win rate to be profitable. Very difficult to sustain.
    • 1:2 R:R: Profitable above 34% win rate. Achievable with disciplined setups.
    • 1:3 R:R: Profitable above 25% win rate. Allows for substantial losing streaks while remaining in profit.
    • 1:5+ R:R: Trend-following strategies can achieve these with win rates as low as 20%.

    Setting targets at arbitrary round numbers without reference to technical levels produces inconsistent R:R. The target should be set at the next meaningful resistance or at a predefined multiple of risk. Placing a target too close reduces R:R below 1:2 and makes the strategy mathematically marginal.

    Frequently asked questions

    What is a good risk-to-reward ratio for beginners?â–¼
    A minimum of 1:2 R:R is the standard recommendation. This means your potential profit is at least double your potential loss on every trade. At this ratio, you can be wrong more often than you're right and still make money — a 40% win rate generates net profits at 1:2 R:R.
    Should I always target a 1:3 ratio even if the technical level is at 1:2?â–¼
    No. Forcing a 1:3 R:R on a setup where the next resistance is at 1:2 means setting an unrealistic target that price is unlikely to reach. A consistent 1:2 R:R executed well beats an aspirational 1:3 R:R that rarely gets filled. Target the next real supply zone or technical level, then evaluate if the resulting R:R meets your minimum threshold.
    How does R:R relate to my overall profitability?â–¼
    Expected value = (Win rate × Average gain) – (Loss rate × Average loss). At 40% win rate with 1:2 R:R: (0.4 × 2) – (0.6 × 1) = +0.2 per unit of risk. This means every trade generates 0.2× your risk in expected profit. Track your actual win rate and average R:R over 50+ trades to measure your true edge.
    Can I have a high R:R and a high win rate simultaneously?â–¼
    Rarely. High-R:R trades require price to travel far to target, which happens less frequently, lowering win rate. Low-R:R trades are easier to win. Trend-following sacrifices win rate for high R:R; mean-reversion sacrifices R:R for high win rate. Both can work — the math must close.