Risk/Reward Ratio Calculator
Risk/Reward Ratio FAQ
What is a good risk/reward ratio?
Many traders aim for at least 1:2 or 1:3 risk/reward, meaning the potential reward is 2–3 times greater than the risk.
Can a trade with low R/R still be good?
Yes, if the win rate is very high. Scalpers often take low R/R trades but with consistent small wins.
Is risk/reward ratio the same as win rate?
No. Win rate is the percentage of trades that succeed, while risk/reward is how much you win compared to how much you risk.
Why is R/R ratio important?
It prevents traders from taking trades with high risk and low reward, promoting discipline and long-term profitability.
Does R/R guarantee profitability?
No. It's just one factor. A trader also needs a good strategy, risk management, and discipline.
Is R/R used in crypto only?
No, it's universal in trading — used in stocks, forex, commodities, and crypto alike.
What is Risk/Reward Ratio in Trading?
The Risk/Reward (R/R) ratio is a fundamental metric in trading and investing that compares the potential profit of a trade (reward) to the potential loss (risk). It helps traders evaluate whether a trade is worth taking based on how much they could win versus how much they could lose.
For example, if a trader risks $100 to potentially make $300, the risk/reward ratio is 1:3. This means for every unit of risk, there are three units of potential reward. A good R/R ratio depends on strategy, but many traders look for setups with a minimum of 1:2 or higher.
Using a risk/reward calculator allows traders to plan their trades with discipline, avoid emotional decisions, and focus on setups with a favorable edge. This tool is widely used in crypto trading, forex, and stock markets.