Risk/Reward Ratio Calculator
See if a trade setup is worth taking before you enter.
A ratio of 1:2 or better is generally considered a healthier trade setup.
Why Risk/Reward Ratio Matters More Than Win Rate
A trading strategy doesn’t need to win most of the time to be profitable — it needs a favorable relationship between what you risk and what you stand to gain. This risk/reward ratio calculator compares your entry, stop loss, and take profit to show that ratio instantly.
What counts as a good ratio
A 1:2 risk/reward ratio means you’re risking one unit to potentially gain two. At that ratio, a strategy that wins just 40% of the time can still be profitable overall, because winning trades outweigh losing ones. Many professional traders won’t take a setup below 1:1.5, regardless of how confident they feel about the direction.
Using this before every trade
Checking risk/reward before entry — not after, once you’re already emotionally invested in the trade — helps filter out marginal setups where the potential reward doesn’t justify the risk being taken.
