Risk/Reward Ratio Calculator
The reward-to-risk ratio compares what a trade stands to make against what it stands to lose. The number most people skip is its consequence: every R:R implies a minimum win rate just to break even. A 1:3 trade only needs to work one time in four; a 1:1 trade needs to work more than half the time. This calculator shows both at once.
- • Risk = |entry − stop|. Reward = |target − entry|.
- • Reward : risk = reward ÷ risk (shown as 1 : R).
- • Break-even win rate = risk ÷ (risk + reward) = 1 ÷ (1 + R). Win less often than this and you lose money even with a good ratio.
Worked example: risking $5 to make $15 is a 1 : 3 ratio, so you only need to be right 5 ÷ 20 = 25% of the time to break even.
A great ratio is worthless if the setup rarely reaches its target, and costs push the required win rate higher. Educational tool, not advice.
A free, interactive calculator for any blog, newsletter or forum — same numbers as here, and it links back.
<iframe src="https://stratsemble.com/embed/tools/risk-reward-calculator" width="460" height="400" style="border:0;border-radius:12px;max-width:100%" loading="lazy" title="Risk / reward calculator — Stratsemble"></iframe>A calculator shows what a rule should do on paper. A backtest is how you find the rare few that actually beat simply buying and holding — costs on, losses shown, no look-ahead — so when you build one that survives, you'll know it isn't a fake edge, and can prove it forward before you risk real money. It won't tell you you'll win — nothing honest can.