How to use Risk / Reward Calculator
Compare your entry, stop loss, and target before a trade.
- Choose the operation and enter every labeled input, keeping units and the time period consistent.
- Calculate, compare the worked example below and inspect any warnings.
- Change one assumption to compare another scenario; keep the model’s limits in view.
Formula & calculation method
Risk is the price distance from entry to stop loss. Reward is the distance from entry to the target. Express reward divided by risk as a 1:N ratio. The theoretical break-even win rate before costs is risk ÷ (risk + reward).
Input reference · 4 fields
These labels describe the calculation’s base units. Supported measurements can switch through the header’s region settings; follow the current workspace labels. Prefilled values are examples.
- Trade direction
- Buy expects a rise; Sell expects a fall.
- Entry price
- Your assumed opening price.
- Stop-loss price
- Must be on the loss side of the entry.
- Take-profit price
- Must be on the profit side of the entry.
A quick example
Buy at 1.1000, stop 1.0950, target 1.1100 gives a 1:2 risk/reward ratio before costs.
Assumptions, edge cases & limits
- Educational estimate. Excludes spreads, commissions, swaps, slippage, and broker-specific margin tiers. A stop loss does not guarantee the exit price. Verify contract sizes and rates with your broker.
- The stop and target must be on the correct sides of entry for the selected Buy or Sell direction.
Questions about Risk / Reward Calculator
Does a 1:2 risk/reward ratio prove a strategy is profitable?
No. It compares planned distances. Win frequency, costs, slippage and actual exits also determine outcomes. The displayed break-even rate is a theoretical before-cost figure.
Why must the stop and target be on different sides of entry?
For a Buy, the stop must be below entry and target above; Sell reverses those directions. Otherwise the entered prices do not represent the intended loss and reward distances.
Are my files or inputs uploaded?
Calculation and file processing run in your browser without a processing upload. Downloads go to your device. Choosing a next-step transfer creates a temporary local copy for that workflow. Region preferences are stored separately from tool inputs. See our privacy details.
Can I use this tool for free?
Yes. No signup, subscription or payment is required to use the tool or download its output. File tools have device and size limits; a smaller batch may work better on a phone.
Method & references
Read the underlying method or measurement convention in context. These references do not imply affiliation or endorsement.
OANDA: pips and forex conventions ↗Educational finance estimates. Verify rates and contract specifications with your broker.A result or explanation needs correcting? Tell us the tool name and an example.