Risk Reward Calculator
Enter your entry, stop and target. You get the risk reward ratio, the target in R, the win rate you need to break even and, if you add your exit, the result of the trade in R. Add a futures contract to see the dollars.
How the risk reward ratio is calculated
- Risk (1R) = distance from entry to stop. This is what you lose if the stop is hit.
- Reward = distance from entry to target.
- Risk reward ratio = 1 : (reward ÷ risk). The same number is your target in R.
- Break-even win rate = risk ÷ (risk + reward). Below it, the setup loses money over many trades, before fees.
- Exit result in R = (exit − entry) ÷ (entry − stop). A full stop-out is −1R.
The calculator reads the direction from the stop: a stop below the entry is a long, a stop above it is a short.
Worked example: a short MES trade
You sell 2 MES at 5,000 with a stop at 5,010 and a target at 4,975. You risk 10 points to make 25, a ratio of 1 : 2.5, so the target is 2.5R. You need to win more than 1 ÷ 3.5 = 28.6% of these trades to break even. In dollars, MES is $5 per point (CME): 1R is 10 × $5 × 2 = $100 and the target pays $250.
If you cover at 4,990 instead of the target, the trade made 10 points against 10 points of risk: +1.0R. That is the number worth recording, because it lets you compare this trade with a 1-contract NQ trade or a crude oil trade on the same scale.
Break-even win rate by ratio
| Risk : reward | Target in R | Break-even win rate |
|---|---|---|
| 1 : 1 | 1R | 50.0% |
| 1 : 1.5 | 1.5R | 40.0% |
| 1 : 2 | 2R | 33.3% |
| 1 : 2.5 | 2.5R | 28.6% |
| 1 : 3 | 3R | 25.0% |
| 1 : 4 | 4R | 20.0% |
Before commissions and slippage. Dollar values use tick values from the CME Group contract specifications, checked on October 23, 2026; the full table is on the futures calculator.
Frequently asked questions
How do you calculate the risk reward ratio?
Risk is the distance from your entry to your stop. Reward is the distance from your entry to your target. Divide reward by risk. A long at 100 with a stop at 98 and a target at 106 risks 2 to make 6, which is a 1:3 risk reward ratio, or a 3R target.
What is a good risk reward ratio?
There is no single good ratio; it only makes sense together with your win rate. At 1:1 you need to win more than 50% of trades to make money before fees, at 1:2 more than 33.3%, at 1:3 more than 25%. A high ratio with a win rate below that line still loses money.
What does R mean in trading?
R is the amount you risk on a trade, the loss you take if the stop is hit. Results are then measured in multiples of it: a trade that makes twice the risk is +2R, a full stop-out is -1R. Measuring in R lets you compare trades with different position sizes and contracts.
What win rate do I need at a given risk reward ratio?
The break-even win rate is risk divided by risk plus reward. For a 1:2.5 setup that is 1 / 3.5 = 28.6%. Commissions and slippage push the real break-even point higher, so leave a margin.
Should I calculate risk reward in points or dollars?
The ratio is the same in both, because the same contract and size apply to the stop and the target. Dollars matter for position sizing: pick a contract and size to see the money at risk, then check it against your daily loss limit.
Save the trade in your journal
A planned ratio means little until you know what you actually got. The MyTradeEdge journal keeps every trade, grades it and shows win rate by strategy, so you can check your real win rate against the break-even line above. The free plan needs no credit card.
Save the trade in your journalMore free tools: position size calculator, futures calculator, all tools.
This calculator is an educational tool, not trading advice. Futures trading involves substantial risk of loss.