Risk / Reward Calculator
Enter an entry price, stop price, target price, and long or short direction to calculate risk per unit, reward per unit, reward-to-risk ratio, and the simple break-even win rate implied by that ratio. It uses country-neutral arithmetic and does not include fees, taxes, slippage, leverage, or execution differences.
Use the risk/reward calculator to compare the planned downside from an entry price to a stop price with the planned upside from entry to a target price. It supports both long and short setups and shows risk per unit, potential reward per unit, percentage distances, the reward-to-risk ratio, and a simple mathematical break-even win rate. The calculator is useful for checking whether the price levels in a trading plan are internally consistent before a trade, but it does not estimate whether the trade will succeed.
How to use the risk/reward calculator
- Choose Long when the target is above the entry and the stop is below it, or Short when the target is below the entry and the stop is above it.
- Enter the planned entry price, stop-loss price, and target price.
- Review the risk per unit, potential reward per unit, reward-to-risk ratio, and simple break-even win rate.
- Change the stop or target to compare alternative price plans before using any result in a real order.
How risk, reward, and break-even rate are calculated
For a long setup, risk is entry − stop and reward is target − entry. For a short setup, risk is stop − entry and reward is entry − target. Both are treated as positive price distances after the direction is validated.
Reward-to-risk equals potential reward ÷ risk. A displayed ratio of 1 : 2 means the planned reward distance is twice the planned loss distance. A ratio alone does not indicate the probability that the target will be reached.
The simple break-even win rate is calculated as 1 ÷ (1 + reward-to-risk). At a 2-to-1 reward-to-risk ratio this is about 33.33%, assuming every winning trade earns exactly the target amount and every losing trade loses exactly the stop amount.
Real trading rarely matches that simplified assumption perfectly. Commissions, bid-ask spreads, slippage, gaps, partial exits, trailing stops, position sizing, leverage, financing costs, taxes, and execution failures can all change the actual result.
Privacy, limitations, and investment notice
The entered prices stay in your browser. This tool is a price-distance calculator, not a trading signal, probability model, position-size recommendation, or guarantee of execution. A high reward-to-risk ratio can still describe a low-probability trade, while a lower ratio can still be part of a viable strategy depending on many other factors. Stops can fill at prices different from the number entered, especially during gaps or fast markets. Use the result as a planning reference only and verify real costs, order behavior, and your own risk limits before trading.
Risk/reward calculator FAQ
What does a 1:2 risk/reward ratio mean?
It means the planned reward distance is twice the planned risk distance.
Is a higher reward-to-risk ratio always better?
No. The ratio says nothing by itself about the chance of reaching the target.
What is the break-even win rate?
It is the theoretical win rate that would produce a zero result under the simplified assumption that every win and loss exactly matches the entered target and stop.
Does the break-even rate include commissions and slippage?
No. Real costs generally raise the required win rate.
Can I calculate short trades?
Yes. Select Short and use target < entry < stop.
Does the calculator determine position size?
No. It calculates price distances and ratios only.
Does it account for leverage?
No. Leverage affects account-level profit, loss, margin, and liquidation risk but is not part of this calculation.
Can a stop execute at a different price?
Yes. Gaps, low liquidity, and fast markets can produce slippage.
Does this tool recommend a trade?
No. It only calculates the relationship between the prices you enter.
Are my trading levels uploaded?
No. They remain in the browser.