Free tools · risk reward

Risk-reward calculator

Enter entry, stop loss and target. You get the risk-reward ratio, the win rate you need to break even, and how much you make when the target is hit.

Direction
Risk : reward–
Win rate needed to break even–
Risk (price)–
Reward (price)–
You make at the target–

Runs in your browser; nothing you type is sent anywhere. For learning and planning only, not financial advice. Check your broker's contract specification before trading.

Risk-reward and win rate go together

The ratio compares what you can lose (entry to stop) with what you aim to win (entry to target). With 1 : 3 you risk $1 to make $3. The break-even win rate is 1 ÷ (1 + reward/risk): at 1 : 3 you only need to win 25 % of your trades to break even, before costs. At 1 : 1 you need 50 %.

Example

Buy gold at 4,000, stop 3,995 ($5 risk), target 4,015 ($15 reward): 1 : 3. If you risk $10 on the trade (see the lot size calculator), the target pays $30.

A bigger ratio is not always better

Far targets are hit less often. A good target sits at a level the market is likely to reach: an old high or low (liquidity), the other side of a range, or an opposing fair value gap. Check your own results: if your win rate stays under the break-even line, the plan needs changing, not only the ratio.

Questions

What is a good risk reward ratio?

Many traders aim for 1 : 2 or more, but what matters is ratio and win rate together. 1 : 2 with a 40 % win rate is profitable before costs; 1 : 4 with a 15 % win rate is not.

Does the calculator include spread?

No. Add the spread to your stop distance for a more careful number.

Practise and trade with a plan

See fair value gaps, order blocks and liquidity drawn for you on live charts in ICC Charts, or train your eye in the free Chart Challenge game.

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