How this calculator works — Risk/Reward Calculator
Risk/reward is the exchange rate of your trade: how many dollars you're offering to risk for how many dollars of target. It matters more than win rate — a system that wins only 40% of the time is comfortably profitable at 1:2, while a 70% win rate dies fast at 1:0.5.
Breakeven win rate = 1 ÷ (1 + R:R)
Expectancy = Win% × Avg win − Loss% × Avg loss
The R:R → win rate cheat sheet
| Risk : Reward | Breakeven win rate | Meaning |
|---|---|---|
| 1 : 1 | 50% | You must win more than half — most strategies don't |
| 1 : 1.5 | 40% | Reasonable minimum for trend trades |
| 1 : 2 | 33.3% | ⭐ The professional standard |
| 1 : 3 | 25% | Excellent — but targets get hit less often |
| 1 : 0.5 | 67% | ⚠️ High-win-rate scalping — one bad day erases a week |
CFDs and Forex are complex instruments with a high risk of losing money rapidly due to leverage. Ensure you understand how these products work before trading. See our risk disclaimer.
Frequently asked questions — Risk/Reward Calculator
Is 1:1 risk/reward ever acceptable?
Only with a genuinely proven win rate above ~55–60% after costs (spread + commission are the hidden killer at 1:1). For most traders, chasing sub-1:1 setups is how accounts bleed slowly.
Should I include spread and commission?
Yes, ideally. Add ~1–2 pips of cost to your effective stop and subtract from your effective target — the honest numbers. Costs turn marginal 1:1 setups into losers.
What win rate should I use?
Your real one — from at least 30–50 journaled trades on demo or small size, using the same strategy. Guessing 60% is how traders rationalize bad math.
Does a high R:R mean a better trade?
No — it means a lower breakeven win rate, but far targets hit less often. Judge the whole package: structure quality, R:R, and how the target fits the timeframe you trade.