Potential gain vs potential loss per trade. The Risk-Reward Ratio Calculator takes entry price, stop-loss price, target price and returns reward to risk ratio plus risk per share, reward per share, win rate needed to break even. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Investment maths is about comparing money at different points in time on a fair basis. Compound rates, discounting and annualised returns let you compare options of different sizes and durations. Use the worked example below to check the maths against your own figures.
How the Risk-Reward Ratio Calculator works
A 3:1 reward-to-risk trade breaks even with only a 25% win rate. Set the stop and target before entering and let the ratio decide whether the trade is worth taking.
Worked example
With the example values (entry price of $100, stop-loss price of $95, target price of $115), the reward to risk ratio is 3.00x; risk per share $5.00, reward per share $15.00, win rate needed to break even 25%. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is reward to risk ratio calculated?
reward:risk = (target − entry) ÷ (entry − stop); break-even win rate = risk ÷ (risk + reward).
Which figures do I need?
Entry price, stop-loss price, target price. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
Does the calculator account for taxes and fees?
Only where there is an input for them. For a true net return, add fees and taxes to your inputs or use the stock and crypto profit calculators, which include them.
