Risk to reward calculator
The geometry of a planned trade: how far the target is compared with how far the stop is. A ratio describes the plan - it says nothing about whether price will ever reach the target.
What the number means
Divide the distance to your target by the distance to your stop and you get the ratio. 2:1 means the win, when it comes, pays for two losses. The break-even win rate follows directly: at 2:1 you need to win 33.33% of the time to stand still; at 1:2 you need 80%.
The ratio is a property of where you drew three lines, and only that. Moving a target further away improves the ratio of every plan, including terrible ones - it does not make price any more likely to go there. A ratio filters trades; it cannot validate them.
Worked example
Entry at 100, stop at 95, target at 110.
- Risk: 100 − 95 = 5. Reward: 110 − 100 = 10
- Ratio: 10 ÷ 5 = 2.00 : 1
- Break-even win rate: 100 ÷ (1 + 2) = 33.33%
Win a third of the time at this ratio and you are flat before costs. The unit test suite pins these exact figures.
Embed this calculator
Copy the snippet. The attribution link is part of the licence to embed - keep it visible.
<iframe src="https://ticksprout.com/tools/risk-reward?entry=1.1&stop=1.095&target=1.11&embed=1" width="100%" height="580" style="border:0" title="Risk to reward calculator" loading="lazy"></iframe>
<a href="https://ticksprout.com/tools/risk-reward">Risk to reward calculator by Tick Sprout</a>Related tools
- Risk of ruin calculator
The probability a strategy ever loses a chosen share of its account.
45% win, 2.0 payoff, 1% risk → ~0% risk of ruin
- Gap cost calculator
What a gap through your stop actually costs, beyond the loss the stop planned.
EUR/USD 1 lot, 20-pip stop, 60-pip gap → $600 over plan
- Position size calculator
How much to buy or sell so a stopped-out trade costs exactly what you planned to risk.
1% of $10,000, 20-pip stop, EUR/USD → 0.5 lots