Risk Reward Calculator
Never take a trade with less than 1:2 RR. Visualize your potential profit vs. loss instantly.
Why 1:2 is the Holy Grail of Trading
You don't need to win every trade to be rich. In fact, you can lose 50% of your trades and still make a fortune—IF your Risk to Reward (RR) ratio is correct.
Risk Reward Ratio measures how much you are risking (Stop Loss distance) versus how much you plan to gain (Target distance).
The Math of Profitability
- 1:1 RR: You risk $100 to make $100. You need a 50%+ win rate just to break even. This is hard.
- 1:2 RR: You risk $100 to make $200. You only need to win 33% of your trades to break even. If you win 40%, you are profitable.
- 1:3 RR: You risk $100 to make $300. You can lose 70% of the time and still not lose money. This is where the magic happens.
How to Use This Tool
Simply enter your planned Entry price, Stop Loss, and Target price. The tool will instantly calculate the ratio.
Pro Tip: If the calculator shows anything less than 1:1.5, skip the trade. It's not worth the risk. The market is a probability game, and you need the odds in your favor.
Common Questions
Can I use this for Short selling?
Yes! The calculator automatically detects if your Entry is lower than your SL (Short trade) or higher (Long trade). Just enter the numbers.
What is a "good" RR?
Most professional traders aim for at least 1:2. However, scalpers might take 1:1 if they have a very high win rate (70%+). Swing traders often look for 1:3 or higher.
Should I move my Stop Loss to improve RR?
NO. Never tighten your stop loss just to make the math look good. Your stop loss should be placed at a technical invalidation point (e.g., below support). If the RR is bad with the correct stop loss, simply don't take the trade.