Free Tool
Risk : Reward Ratio Calculator
Risk:reward is the number that forgives your losses. At 1:3, you can be wrong twice for every time you are right and still grow the account. This calculator gives you the exact ratio of any planned trade — and, more importantly, the minimum win rate that makes it viable.
If the ratio does not clear your minimum, the correct action costs nothing: skip the trade.
Risk : Reward Calculator
The breakeven win rate
Every ratio implies a breakeven win rate: 1:1 needs 50%, 1:2 needs 33.4%, 1:3 needs 25%. Trade below that win rate and the account bleeds no matter how disciplined you are; trade above it and the edge compounds. This single relationship explains why professionals obsess over trade selection rather than trade frequency.
Our desk standard is a minimum of 1:2 — anything less demands an unusually high win rate that few strategies sustain across hundreds of trades.
Where targets should come from
A ratio is only as honest as its target. Targets pulled from thin air to inflate the ratio fail at the first real resistance. We teach students to place targets at structural objectives — the next liquidity pool, the origin of the opposing move — and then check whether the resulting ratio justifies the trade, not the reverse.
The stop follows the same rule: it belongs behind the level that invalidates the idea, not at a round number of pips.
Frequently asked questions
What is a good risk to reward ratio?
Most professional traders require a minimum of 1:2 — one unit of risk for at least two units of potential reward. At 1:2 you break even winning just 33.4% of trades, so even a modest win rate produces growth.
How is the risk reward ratio calculated?
Divide the distance from entry to target by the distance from entry to stop loss. If you risk 50 pips to make 150 pips, the ratio is 1:3.
What win rate do I need to be profitable?
It depends on your average ratio. The breakeven win rate is 1 ÷ (1 + R), where R is your reward multiple. At 1:2 you need more than 33.4%; at 1:3, more than 25%. Anything above breakeven — sustained across a large sample — is a profitable system.
Is a higher ratio always better?
No. Extremely distant targets get hit less often, which lowers your win rate. The goal is the best ratio the structure genuinely offers — not the biggest number you can type into a calculator.
Every P4 signal ships with the R:R attached.
Entry, stop, two targets, and the eight-point reasoning behind them — wins and losses published in the verified track record.
See the Track RecordEducational tool only — not financial advice. Results are estimates; broker contract sizes, spreads, commissions and swap can change real outcomes. Learn the concepts on the blog.