Risk Reward Ratio Calculator (2025)

Risk-Reward Ratio Calculator

Calculate your trade’s potential risk and reward before entering a position.

Risk Amount

0.00

Reward Amount

0.00

Risk-Reward Ratio

1 : 0.0

?

How to Use

Enter your planned entry, stop loss, and take profit prices. The calculator will instantly show your risk per unit, potential reward, and the ratio between them.

A ratio above 1:1 means your potential reward exceeds your risk.

What Is a Risk Reward Ratio (RRR)?

The Risk Reward Ratio measures the potential profit of a trade relative to its potential loss.

Formula:

RRR=RRR=

Example:

  • Take Profit (TP): 100 pips
  • Stop Loss (SL): 50 pips
  • RRR = 100 / 50 = 2:1

A good RRR is typically 1:2 or higher—meaning you aim for twice the profit vs. risk.

Why Using a Risk Reward Ratio Calculator Is Essential

1. Ensures Profitable Trading Strategies

  • Even with a 50% win rate, a 2:1 RRR keeps you profitable long-term.

2. Prevents Emotional Trading

  • Sets clear exit points (TP & SL) before entering a trade.

3. Improves Trade Selection

  • Filters out low-probability, high-risk trades.

4. Works for All Markets

  • Forex, stocks, crypto, and commodities.

Top Features of a Good RRR Calculator (2025)

✅ Easy Input of Entry, SL, & TP Levels

  • Calculates RRR instantly.

✅ Visual Trade Simulation

  • Charts potential outcomes.

✅ Multiple Asset Support

  • Forex pairs, stocks, crypto.

✅ Mobile & Desktop Compatibility

  • Works on TradingView, MT4, or standalone apps.

✅ Advanced Metrics (Win Rate Analysis)

  • Shows required win rate for profitability.

How to Use a Risk Reward Ratio Calculator (Step-by-Step)

Example Trade (EUR/USD):

  1. Entry Price: 1.0800
  2. Stop Loss (SL): 1.0750 (50 pips risk)
  3. Take Profit (TP): 1.0900 (100 pips reward)

Calculation:

  • RRR = 100 pips / 50 pips = 2:1
  • This is a favorable trade setup!

5 Pro Tips to Improve Your Risk Reward Ratio

  1. Aim for at least 1:2 RRR (better 1:3 for swing trading).
  2. Adjust position sizes to keep risk per trade below 2%.
  3. Use trailing stop-losses to lock in profits.
  4. Avoid revenge trading—stick to your RRR plan.
  5. Backtest strategies to find optimal RRR settings.

FAQs About Risk Reward Ratio Calculators

1. What is the best Risk Reward Ratio?

  • 1:2 or higher is ideal for long-term profitability.

2. Can I have a high win rate with a low RRR?

Yes, but you’ll need >60% win rate for a 1:1 RRR to be profitable.

3. Should I always use a fixed RRR?

No—adjust based on market conditions (e.g., tighter RRR for scalping).

4. Do professional traders use RRR calculators?

Yes! Hedge funds & prop traders rely on precise risk management.

5. Is a 1:5 RRR better than 1:2?

Not always—higher RRR means lower win rate is acceptable, but trades may be harder to hit.