Risk/Reward Calculator

Evaluate your trade setup before entering. Input your entry, stop loss, and up to 3 take-profit targets to see if the risk is worth the reward.

Trade Setup

Entry Price ($)

Stop Loss ($)

Target 1 ($)

Target 2 ($) optional

Target 3 ($) optional

Best Risk/Reward Ratio

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Risk (Downside)

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Quick Guide

Below 1:1 — Poor. Risk outweighs reward.

1:1 to 1:2 — Marginal. Needs high win rate.

1:2 to 1:3 — Good. Standard for swing trading.

Above 1:3 — Excellent. Ideal setup.

Understanding Risk/Reward Ratios

The risk/reward ratio compares how much you stand to lose versus how much you stand to gain on a trade. A ratio of 1:3 means for every $1 you risk, you could gain $3. Professional traders typically look for setups with at least a 1:2 risk/reward ratio.

Why Most Traders Ignore This (And Fail)

A trader with a 40% win rate can still be profitable if their average winner is 3x their average loser. This is why calculating risk/reward BEFORE entering a trade is essential. It's not about being right more often — it's about making more when you are.

Tip: Always calculate your risk/reward ratio before entering a trade. If the setup doesn't offer at least 1:2, consider passing on the trade and waiting for a better opportunity.

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