Risk & Money Management
Risk/Reward & Expectancy Calculator
Find your reward-to-risk ratio and the win rate needed to break even from entry, stop and target — plus an expectancy calculator for win %, average win and loss.
Reward-to-risk ratio
3 : 1
- Reward
- $15.00
- Risk
- $5.00
- Breakeven win rate
- 25%
Expectancy per trade
$80.00
- In R multiples
- 0.80R
- Loss rate
- 55%
How this is calculated
The reward-to-risk ratio compares your potential profit to your potential loss:
R:R = (target − entry) ÷ (entry − stop) for a long.breakeven win rate = 1 ÷ (1 + R:R)
Expectancy is the long-run average result per trade: (win% × avgWin) − (loss% × avgLoss). A positive expectancy means a statistical edge; the R-multiple version divides by your average loss to express it in units of risk.
Frequently asked questions
- What is a good risk/reward ratio?
- A ratio of 2:1 or higher is common, meaning the target is at least twice the distance of the stop. Higher R:R lets you be profitable with a lower win rate.
- What is breakeven win rate?
- It is the win percentage at which a strategy neither makes nor loses money for a given R:R. It equals 1 ÷ (1 + R:R).
- What is expectancy?
- Expectancy is the average profit or loss per trade: (win % × average win) − (loss % × average loss). A positive number means a statistical edge.