Calculator
Risk/reward calculator
Enter the entry, stop and target prices. The calculator returns the distance at risk, the distance to target, the reward-to-risk ratio, and the win rate you need to break even before costs.
Reward to risk
2.00 : 1
Risk 0.0024 · Reward 0.0048
Breakeven win rate
33.3%
Before spread, commission and slippage.
The direction does not matter: the calculator uses the distance between entry, stop and target, so it works for long and short trades.
The formula
A trade risking 20 pips to make 60 pips has a 3:1 reward-to-risk ratio. The breakeven win rate is 1 ÷ (1 + 3) = 25%. Before costs, a trader winning more than one in four trades at that ratio would be profitable.
Why the breakeven win rate matters
It connects two numbers that are usually discussed separately. A strategy with a 40% win rate needs an average reward-to-risk above 1.5 to break even before costs. A strategy with a 70% win rate can break even at a much lower ratio. Neither number is good or bad on its own.
- Use the actual stop and target from your plan, not the best-case exit.
- Include spread, commission and slippage in the risk distance.
- Treat the breakeven win rate as a floor, not a target.
- Review the realised ratio after the trade, not just the planned one.
Planned versus realised
The ratio you plan is not always the ratio you get. Moving a stop, closing early or letting a winner run changes it. A journal that records the plan and the exit makes the difference visible over time.
Questions and answers
Is a higher reward-to-risk ratio always better?
No. A higher ratio usually comes with a lower win rate. The combination of ratio, win rate and costs determines the result. A 10:1 target that almost never fills is not better than a 2:1 target that fills regularly.
Does the calculator work for short trades?
Yes. It uses the absolute distance between entry and stop, and entry and target, so the direction does not change the ratio.
What win rate do I need at 1:1?
At 1:1 the breakeven win rate is 50% before costs. With spread and commission, you need to win more than half of your trades to be profitable.
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