Risk Reward Calculator: Free R:R Tool for Any Trade

This free risk reward calculator turns your entry, stop-loss and take-profit prices into hard numbers before you place the trade. Enter the three price levels, pick the pip size for your instrument, and the tool returns the risk in pips, the reward in pips, the ratio in the standard "1 : X" format, and the money on the line at your chosen lot size. It works for any pair, plus gold, and it runs entirely in your browser. Nothing is sent anywhere.

How to use the risk reward calculator

The risk reward calculator needs three prices from your chart and three settings from your trade ticket. Here is the full workflow:

1. Pick the trade direction. Buy means you profit when price rises. Sell means you profit when price falls.
2. Enter your planned entry price. Use the exact level from your order ticket, not a rounded number.
3. Enter the stop-loss price. For a Buy it sits below the entry. For a Sell it sits above.
4. Enter the take-profit price. For a Buy it sits above the entry. For a Sell it sits below.
5. Select the pip size. Standard pairs like EURUSD use 0.0001. JPY pairs use 0.01. Gold uses 0.1 on most platforms.
6. Enter the pip value per standard lot in USD. It is 10 USD on USD-quote pairs. For yen pairs and crosses, look it up with the pip value calculator.
7. Enter your lot size. If you have not sized the trade yet, get it from the position size calculator first.
8. Press Calculate. The tool shows both distances in pips, the ratio, and the money on each side of the trade.

The tool also checks your geometry. If the stop and target sit on the wrong sides of the entry for the chosen direction, it tells you instead of printing a nonsense ratio. That catch alone prevents a common order-ticket mistake.

A worked EURUSD long example

Say EURUSD trades at 1.0850 and you want to buy a bounce from support. You place the stop-loss at 1.0820, just under the recent swing low. You set the take-profit at 1.0910, below the next resistance zone. Your lot size is 0.10 and the pip value is 10 USD per standard lot.

The risk distance is 1.0850 minus 1.0820, which is 0.0030, or 30 pips. The reward distance is 1.0910 minus 1.0850, which is 0.0060, or 60 pips. Divide reward by risk and you get 2. The ratio reads 1 : 2.00. You risk one unit to target two.

Now the money. At 0.10 lots, each pip is worth 1 USD. A stopped-out trade costs 30 USD. A trade that reaches the target pays 60 USD. Those two numbers frame the whole decision before you click buy. To model the profit side across other pairs and lot sizes, use the forex profit calculator.

The math behind risk to reward

The arithmetic is simple, and it helps to see it written out. Risk in pips equals the distance between entry and stop-loss, divided by the pip size. Reward in pips equals the distance between entry and take-profit, divided by the pip size. The ratio is reward divided by risk, written as 1 : R.

Money converts the same way on both sides. Money at risk equals risk pips times pip value per lot times lot size. Potential reward equals reward pips times the same two factors. Because both sides use the same pip value and lot size, the money ratio always matches the pip ratio. A 1 : 2 trade in pips is a 1 : 2 trade in dollars.

One detail trips people up. The ratio says nothing about how likely either outcome is. It only describes the payoff if one of the two levels is hit first. Two trades can both show 1 : 2 and have completely different chances of reaching the target. The ratio is a measuring stick, not a forecast. That distinction drives the next section.

Think in R multiples

Professional trade journals rarely talk in dollars. They talk in R. One R is simply the money at risk on the trade, the same number this tool prints. A trade that hits a 1 : 2 target banks +2R. A stopped-out trade books -1R. Expressing results this way lets you compare trades across pairs, lot sizes and account stages on one clean scale.

R also makes trade management honest. Move the stop to breakeven and your worst case improves from -1R to roughly 0R, though the trade can now get stopped on noise before the target. Trail the stop and your realized R floats with price instead of matching the planned ratio. Cut a winner early at +0.8R on a planned 1 : 2 and you quietly lowered the ratio your breakeven math depends on. Recalculate here whenever you change a level, so the plan on your chart still matches the numbers you tested.

Why a bigger ratio is not automatically better

New traders often chase 1 : 5 or 1 : 10 setups because the payoff looks great on paper. The catch is distance. A target five times farther from entry than the stop is, in most conditions, hit far less often. Price has to travel farther without first pulling back the short distance to your stop. Stretch the target and you trade a higher payoff for a lower hit frequency.

The breakeven math makes this concrete. At 1 : 2, you can lose two trades out of three and still come out flat before costs. At 1 : 5, you only need about one winner in six. But if your setup actually reaches that distant target less than one time in six, the fat ratio still bleeds money. The ratio and the winning-trade percentage must be judged together, never alone.

The practical move is to test, not guess. Log your trades, record how often each setup reaches its target at a given ratio, then run the numbers through the expectancy calculator. Expectancy combines payoff and frequency into one number per trade. That number, not the ratio by itself, tells you whether a rule set has an edge worth trading.

Breakeven winning-trade percentage by ratio

This table shows the winning-trade percentage you need just to break even at each common ratio, before spread and commission. The formula is one divided by one plus R. Work your own numbers with the breakeven calculator.

Risk : Reward	Breakeven winning-trade percentage
1 : 1	50%
1 : 1.5	40%
1 : 2	33.3%
1 : 3	25%
1 : 5	16.7%

Read the table both ways. A higher ratio lowers the bar for how often you must be right. But it usually also lowers how often you are right, because the target sits farther away. Your job is to find the pairing where your real hit frequency clears the breakeven bar with room to spare for costs.

What this calculator cannot tell you

Honest limits matter more than features. First, the tool ignores spread. You buy at the ask and your stop triggers on the bid, so the real risk distance is slightly wider than the raw price gap. On a 30-pip stop with a 1-pip spread, that is about 3% extra risk. Spreads also widen sharply around news and at rollover; check the forex market hours tool to see when liquidity thins out.

Second, it ignores slippage and partial fills. In fast markets your stop can fill beyond its level, and large orders can fill in pieces at mixed prices. The calculator assumes clean fills at your exact levels, which is the best case, not the worst.

Third, it models a single all-in, all-out trade. If you scale out at several targets, your blended ratio differs from any single-target number. Plan that structure with the multi take profit calculator instead.

Finally, and most important: the tool measures payoff, not probability. It cannot tell you whether price will reach the target or the stop first. No calculator can. Treat the output as trade planning arithmetic, then test your setups the way described in the Editorial and Testing Policy before risking real money.

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FAQ

What is a good risk-to-reward ratio?

There is no single correct number. Many traders use 1 : 2 as a working floor because it keeps the breakeven bar at 33.3%. Scalpers often accept 1 : 1 with a high hit frequency, while swing traders stretch to 1 : 3 or more. The right ratio is the one your tested setup actually reaches often enough to clear its breakeven bar.

Should I set the ratio first or the stop-loss first?

Stop first, always. Place the stop where the chart proves your idea wrong, such as beyond a swing point. Then check whether a realistic target offers an acceptable ratio from there. Forcing a ratio by dragging the stop closer puts it inside market noise and gets you clipped on normal fluctuations.

Does the calculator include spread and commission?

No. It measures the raw distance between your price levels. Spread makes the true risk slightly larger and the true reward slightly smaller, and commission adds a fixed cost per lot. Build in a small margin, or tighten the numbers by a pip or two when spreads are wide.

Why does the tool reject my stop and target levels?

The geometry check enforces direction. A Buy needs the stop below the entry and the target above it; a Sell needs the reverse. If you see the message, one of the three prices is on the wrong side, which usually means a typo in the order ticket.

Will a high ratio make my trading profitable?

Not by itself. Profitability depends on the ratio and the winning-trade percentage together, minus costs. A 1 : 5 setup that rarely reaches its target loses money despite the attractive payoff. Test every rule set on a demo account and judge it by expectancy, because results are not guaranteed; past performance is not indicative of future results.

Related tools: atr position size calculator, kelly criterion calculator and risk of ruin calculator, plus the full free forex tools directory.