Risk-Reward Calculator

Every setup is a bet with odds. This page prints the odds before you place it.

How it is calculated

R:R = |target − entry| / |entry − stop|  |  break-even WR = 1 / (1 + R:R)

The break-even win rate is the honest filter: a 1:3 setup only needs to work 25% of the time, a 1:0.5 setup needs 67%. Compare that against your measured win rate and you know instantly whether a setup deserves capital.

Worked example

Long at $60,000, stop $58,500, target $64,500: R:R = 1:3 — risking $25 to make $75 per $1,000, profitable with any win rate above 25%.

FAQ

Is a higher R:R always better?

No — distant targets hit less often, so win rate falls as R:R rises. The product (expectancy) is what matters.

Should I move the stop to break-even?

It locks a free trade but knocks out positions that would have reached target — test in your journal; for many strategies it reduces expectancy despite feeling safer.

Where should the target sit?

At a level the market has a reason to reach: prior highs, liquidation clusters (see the heatmap), measured moves — then take only setups above your R:R threshold.

Related tools

Stop-loss & R targetsWin-rate expectancyLiquidation heatmapPaper trading
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Free, no signup, runs entirely in your browser. Educational tool — not financial advice. Practice the setup risk-free on the MarginPad paper-trading terminal before putting real money behind it.