Built and fact-checked by the DocNectar team — see our editorial standards
Key Features
Instant Calculation
Get accurate results in real time with our optimized algorithm.
Mobile Friendly
Fully responsive design. Works on all devices & screen sizes.
Privacy Focused
Your data stays on your device. We don't store any inputs.
100% Free
No hidden costs. This tool is completely free forever.
Risk-reward ratio answers a simple but crucial question before entering any trade: how much am I risking compared to how much I stand to gain? A favorable ratio means a trading strategy can still be profitable even with a lower win rate.
This calculator finds the risk-reward ratio of a planned trade from its entry, stop-loss, and target prices, with a full step-by-step solution.
How it works
Enter your planned entry price, stop-loss price, and target (take-profit) price. The calculator finds the risk (distance from entry to stop-loss) and the reward (distance from entry to target), then expresses their ratio.
- Enter entry price.
- Enter stop-loss price.
- Enter target price.
- Click Calculate to see your results.
Examples
A 1:3 risk-reward trade
With an entry of $50, a stop-loss at $48, and a target of $56, the risk is $2, the reward is $6, giving a risk-reward ratio of 1:3 — a favorable setup risking $1 to potentially make $3.
Who should use it
- Evaluating whether a planned trade's potential reward justifies its risk before entering.
- Comparing risk-reward ratios across multiple potential trade setups.
Industry applications
- Trading and risk management
- Financial market education
Advantages
- Simple, clear ratio calculation from three price points.
- Includes a complete, formula-based step-by-step solution.
Limitations
- Doesn't factor in win rate — a good ratio alone doesn't guarantee a profitable strategy.
Common mistakes to avoid
- Focusing only on the risk-reward ratio while ignoring the strategy's actual historical win rate.
- Moving the stop-loss or target after entering a trade, which changes the ratio from what was originally planned.
Best practices
- Decide on your entry, stop-loss, and target prices before entering a trade, and check the resulting risk-reward ratio meets your minimum threshold beforehand.
Tips
- A strategy with a 1:2 risk-reward ratio can be profitable even with a win rate as low as roughly 34%, since the wins are twice the size of the losses — pair this calculator with your own tracked win rate to judge real profitability.