Risk / Reward
Calculate a trade's R:R ratio, the minimum hit rate needed to avoid losing money and the average expectancy based on your win rate. A key tool for building setups with a statistical edge.
Input
Your historical win rate. Optional — only used to calculate expectancy.
Result
At 1:2.00 you only need a 33% win rate to break even. Always aim for a minimum of 1:2 during prop firm challenge phases.
How this is calculated
R:R = |take profit − entry| ÷ |entry − stop loss|
Both distances are measured as absolute price differences, so the same inputs work for a long or a short without changing any signs.
The break-even win rate is 1 ÷ (1 + R), expressed as a percentage. It is the share of trades that would need to win for the strategy to finish level, before spread, commission and swap are taken into account.
When you supply a win rate, expectancy is reported in units of risk: (win rate × R) − (1 − win rate). A result of 1R means the average trade returns one times the amount risked.
Worked example: an entry at 100 with a stop at 98 and a target at 106 gives a risk of 2 and a reward of 6, so R is 3. Break-even is 1 ÷ 4 = 25%. At a 55% win rate, expectancy is (0.55 × 3) − 0.45 = 1.2R per trade.