Quick examples
Risk : Reward
1 : 3.00
Risk per Share
$5
Reward per Share
$15
Risk/Reward Calculator — Quick Reference
The Risk/Reward Calculator is an online tool that calculate risk-to-reward ratio for trades using entry, stop loss, and target. Everything for the Risk/Reward Calculator is on this page: the interactive calculator, the formula, a worked example, step-by-step guidance, and frequently asked questions — no other pages required.
At a glance
- Main inputs
- Entry and exit prices
- Quantity or position size
- Fees and risk parameters
- Main outputs
- Profit or loss
- Return percentage
- Risk-reward ratio
Direct answers
What is the Risk/Reward Calculator?
The Risk/Reward Calculator is an online tool that calculate risk-to-reward ratio for trades using entry, stop loss, and target.
What formula does the Risk/Reward Calculator use?
This calculator uses the rule: Risk = |Entry − Stop loss|. Enter your values in the tool above to apply it to your numbers.
How does the Risk/Reward Calculator work?
Risk = |Entry − Stop Loss|. Reward = |Target − Entry|. Ratio = Reward / Risk.
Formula Used
The equation below is what this calculator applies. Variable definitions follow when symbols are used.
Equation
Risk = |Entry − Stop loss|
Additional rules
- Reward = |Target − Entry|
- Ratio = Reward / Risk
Worked Example: Entry ₹1,000, target ₹1,150, stop ₹940
Sample inputs and the results this calculator produces for the scenario below.
Inputs
- Entry Price
- $1,000
- Target
- $1,150
- Stop Loss
- $940
Results
- Risk
- $60
- Reward
- $150
- Risk:Reward
- 1 : 2.5
A 1:2 or better risk-reward ratio means you can win less than half your trades and still break even before costs.
How Risk/Reward Calculator Works
Risk = |Entry − Stop Loss|. Reward = |Target − Entry|. Ratio = Reward / Risk.
What to enter
Use the calculator above to set your amounts, rates, and tenure. Results update as you move sliders or type values — switch currency if you are planning in USD, INR, or another supported unit.
Step-by-step
- Open the Risk/Reward Calculator and enter your amounts, rates, and time period in the input fields.
- Review the results panel — totals update instantly when you change any value.
- Compare the worked example and formula below to verify the math matches your scenario.
- Read the FAQs for common edge cases, tax notes, and planning tips specific to this calculator.
Risk/Reward — Frequently Asked Questions
Each question is answered directly below. Expand any item for the full response.
What does a risk-reward ratio tell me?
It tells you how much potential reward you are targeting relative to the money you are risking on a trade. For example, a 1:3 setup risks one unit to potentially make three units.
Is a high risk-reward ratio enough to justify a trade?
No, because win rate and setup quality matter too. A trade with a great-looking ratio can still be weak if the target is unrealistic or the stop placement is poor.
What is a commonly used minimum ratio?
Many traders look for at least 1:2, but the right threshold depends on how often the strategy wins. Lower ratios can still work if the win rate is high and losses are controlled.
How should I use risk-reward with position sizing?
Use risk-reward to assess the setup and position sizing to control the money at risk. One tells you whether the trade is worth considering, and the other tells you how much to trade.
Disclaimer
- This calculator gives you an estimate only. It is not a promise of exact results.
- This is general information, not personal financial, tax, or legal advice.
- You are responsible for your own decisions. Talk to a qualified professional when it matters.
- Trading and investing involve risk. You can lose money.
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