Risk Reward Calculator – Trading Ratio
Calculate risk/reward ratio from entry price, stop loss and target. See how much you risk versus potential profit. Useful for position sizing and trade evaluation.
Risk Reward Calculator
Enter entry price, stop loss and target to get the risk/reward ratio.
Risk/reward formula
Risk = |Entry − Stop loss|, Reward = |Target − Entry|, Ratio = Reward ÷ Risk
Using risk/reward in trading
The risk/reward ratio helps you evaluate whether a trade is worth taking. If you risk $100 to make $300, your ratio is 1:3. Even with a 40% win rate, you can be profitable because your winners outweigh your losers. Many professional traders only take trades with a minimum 1:2 ratio.
Set your stop loss and target before entering a trade. The stop loss limits your downside; the target defines your upside. This calculator shows the resulting ratio so you can decide if the trade fits your strategy. Combine it with our capital gains tax calculator to estimate net profit after taxes.