Free trading calculator
Risk Reward Calculator
Compare the amount you plan to risk with the potential reward before entering a trade.
Risk/reward inputs
Enter your trade plan
Risk-to-reward ratio
1:3
Long trade
- Risk per share
- $2.00
- Reward per share
- $6.00
- Total planned risk
- $200.00
- Potential reward
- $600.00
- Breakeven win rate
- 25%
How it works
Define the downside before focusing on the upside
1. Enter the trade plan
Add the entry price, stop-loss price, target price, and position size.
2. Calculate risk and reward
The tool measures risk per share and reward per share from the price levels.
3. Compare the ratio
The result shows how much potential reward exists for each dollar of planned risk.
Risk reward formula
Reward-to-risk ratio = potential reward ÷ planned risk
A result of 1:3 means the planned reward is three times the planned risk.
Example
- $100 entry
- $98 stop
- $106 target
- $2 risk per share
- $6 reward per share
- 1:3 risk-to-reward ratio
- 25% breakeven win rate before costs
A high ratio does not guarantee a good trade
A large target can create an attractive ratio even when the target is unrealistic. Risk/reward should be evaluated alongside setup quality, probability, liquidity, volatility, and execution.
A strategy with a lower ratio can still work if the win rate and execution are strong. A strategy with a high ratio can fail if the target is rarely reached.
Important limitations
This calculator does not include slippage, commissions, partial exits, gaps, liquidity, taxes, or changing stop and target levels.
It is an educational planning tool—not financial advice or a prediction that the target will be reached.
Review the plan and the result
Track whether your planned ratios match real performance.
Use TradeStaxx to record planned risk, actual execution, notes, screenshots, and the final outcome for every trade.