Free Tool

Risk/Reward Calculator

Evaluate your trade setup by calculating the risk-to-reward ratio, potential P&L, and the minimum win rate needed to stay profitable.

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How does the Risk/Reward Calculator work?

The risk-to-reward ratio (RRR) shows how much you stand to gain relative to how much you could lose. A ratio of 1:3 means your potential profit is 3× your potential loss. Professional traders typically aim for setups with RRR of 1:2 or better.

The break-even win rate tells you the minimum percentage of trades you need to win to be profitable at this RRR. For example, at 1:3 you only need to win 25% of your trades to break even. Optionally enter your position size to see dollar amounts.

Risk = |Entry − Stop Loss|
Reward = |Take Profit − Entry|
RRR = Reward ÷ Risk
Break-even Win Rate = 1 ÷ (1 + RRR)

Want this calculated automatically?

Inside The Firm, RRR is calculated for every trade automatically. Track your actual ratios, analytics, equity curve, and more.