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Risk Ratio Calculator

Calculate your trade's risk-to-reward ratio instantly and make smarter trading decisions.

Disclaimer: Trading is inherently risky, and this calculator does not constitute financial advice. Use this tool at your own risk. We assume no liability for any trading losses.

📊 Results

Absolute Risk: $0.00

Absolute Reward: $0.00

Risk-to-Reward Ratio: –

Reward/Risk Ratio: –

Risk as % of Account: –

Required Win Rate (Break-Even): –

How to Use the Risk Ratio Calculator

  1. Enter your trade details – Input your entry, stop loss, and target prices.
  2. Add your position size – The number of shares or contracts you plan to trade.
  3. (Optional) Enter your account size and risk percentage – This shows how much of your capital is at risk per trade.
  4. View instant results – See your absolute risk, potential reward, and ratio in real time.
  5. Optimize your trade setup – Adjust target or stop loss to improve your risk-to-reward ratio before executing the trade.

What Is a Risk-to-Reward Ratio?

The risk-to-reward ratio (R:R) measures how much potential profit you stand to make compared to what you risk losing. It's a cornerstone of smart trading.

For example, if you risk $100 to potentially earn $300, your ratio is 1:3 – meaning for every $1 you risk, you could make $3.

Example Trade:

→ Risk = $5 per share
→ Reward = $10 per share
→ Risk-to-Reward = 1:2

Traders use this ratio to decide if a trade is worth taking based on their win rate and trading strategy.

Why Risk Ratio Matters in Trading

Successful traders don't rely on luck – they manage risk consistently. The risk ratio helps you identify trades that offer greater reward potential relative to the risk taken.

Using the risk ratio effectively helps you:

Even with a 40% win rate, a consistent 1:3 ratio can still yield profits over time.

Tips for Using the Risk Ratio Calculator

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Frequently Asked Questions

1. What is a good risk-to-reward ratio for trading?

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A good ratio is generally 1:2 or higher. This means you aim to make $2 for every $1 you risk. However, the ideal ratio depends on your win rate and strategy.

2. Can I use this calculator for forex, crypto, or stocks?

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Yes! The calculator works for all markets – forex, crypto, stocks, futures, and commodities. Just enter the correct values for your trade.

3. What if my ratio is less than 1:1?

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A ratio below 1:1 means you're risking more than you stand to gain. You might need to adjust your stop loss or target to improve the setup.

4. How does win rate affect profitability?

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Profitability depends on both win rate and average R:R. Even if you win only 35% of trades, a 1:3 ratio can still make you profitable.

Final Thoughts

The Risk Ratio Calculator is an essential part of every trader's toolkit. By planning your trade's risk and reward in advance, you build discipline, consistency, and control – the foundation of long-term trading success.

Try the calculator above, adjust your numbers, and discover the setups that align with your trading goals.

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