Risk/reward calculator
Check a trade before you place it: how much you risk, how much you aim for, and how often it needs to work.
1 pip = 0.00010
- To stop loss
- 30.0 pips
- To take profit
- 60.0 pips
- Win rate to break even
- 33.3%
- Expectancy per trade
- —
Reading risk to reward
Risk is the distance from entry to stop loss, reward the distance from entry to take profit. A 1 : 2 trade aims to make twice what it risks.
The higher the ratio, the less often the trade needs to work. At 1 : 2 you break even winning one trade in three, before costs.
Risk : reward = 1 : (target distance ÷ stop distance)Breakeven win rate = 1 ÷ (1 + reward : risk)
Questions
What is a good risk to reward ratio?
There is no single best one. Trend strategies often use 1 : 2 or more and win less often; scalpers may use 1 : 1 or lower and win more often. What matters is that ratio and win rate together give a positive expectancy.
Should I always aim for a high ratio?
No. A target far away is reached less often. Set the target where the market structure suggests price can go, then check that the ratio still makes sense.
Does this include spread and commission?
No. Costs move your real breakeven a little higher. The trading calculator shows the cost of a trade on a real broker account.
Trade the same, pay less
Every lot you trade pays spread or commission. Open your account through AutoFXRebate and the broker pays part of that cost back to you as a rebate.
Trading forex and CFDs on margin carries a high risk of losing money. These tools give estimates for planning and education, not investment advice.