Risk/Reward Ratio Calculator with Breakeven Win Rate

How to calculate risk/reward ratio

The formula is simple:

Risk/reward ratio = reward per unit ÷ risk per unit

Risk per unit = the distance from your entry price to your stop-loss.
Reward per unit = the distance from your entry price to your target.

Worked example

Say you buy a stock at $100, set a stop-loss at $95, and a target at $115:

Risk per share = $100 − $95 = $5
Reward per share = $115 − $100 = $15
Risk/reward ratio = $15 ÷ $5 = 1:3
Breakeven win rate = 5 ÷ (5 + 15) = 25%

A 1:3 ratio means you only need to win one in four trades to break even before fees. That is why position sizing and a consistent ratio matter more than being right every time.

How to use this calculator

Choose direction. Select long or short so the tool validates your stop and target placement.
Enter your entry price. Type the price at which you plan to enter the trade.
Enter your stop-loss. Type the price where you would exit to cap your loss.
Enter your target. Type the price where you would take profit.
Read your results. The tool shows your risk/reward ratio, the win rate you need to break even, and your position size based on your account risk.

Breakeven win rate by ratio

Breakeven win rate = risk ÷ (risk + reward). It is the share of trades you need to win, before fees and slippage, just to end up flat at a given ratio:

1:1 needs a 50% win rate
1:1.5 needs 40%
1:2 needs about 33.3%
1:3 needs 25%
1:5 needs about 16.7%

This is why the ratio and the win rate are never separate questions. A 70% win rate at 1:0.5 loses money over time, and a 30% win rate at 1:3 makes it. See win rate vs risk/reward for the arithmetic in full.

When the ratio misleads you

A ratio is only as honest as the target. Pushing the target further out raises the number on screen while lowering the odds that price ever gets there, so a 1:5 setup that fills 5% of the time is worse than a 1:2 that fills half the time. The ratio also ignores costs: spread, commission and slippage all come out of the reward side, and they hurt most on tight stops. Use the ratio to reject setups, not to talk yourself into them.

Frequently asked questions

What is a good risk/reward ratio?

Many traders look for at least 1:2, meaning the potential reward is twice the amount risked. A higher ratio lets you stay profitable with a lower win rate, but no single ratio is "correct"; it depends on your strategy and how often your setups actually reach the target.

How do you calculate the risk/reward ratio?

Risk/reward ratio = potential reward per unit divided by potential risk per unit. Risk per unit is the distance from your entry to your stop-loss. Reward per unit is the distance from your entry to your target. For example, risking $5 to make $15 is a 1:3 ratio.

What win rate do I need to break even?

Your breakeven win rate is risk divided by the sum of risk and reward. At 1:2 you need to win about 33.3% of trades to break even; at 1:3, about 25%. The calculator shows this automatically as you change your prices.

How is position size calculated?

Position size = the dollar amount you are willing to risk divided by your risk per unit. If you risk 1% of a $10,000 account ($100) and your stop is $5 away from entry, your position size is 20 units. This keeps each trade within your risk budget.

Is this risk/reward calculator free?

Yes. The calculator is completely free, runs in your browser, and requires no signup. Nothing you enter leaves your device.

Related calculators and guides

Position size calculator: turn your risk percentage and stop distance into an exact number of units.
Stock average calculator: your average cost per share across multiple buys.
Pip value calculator: what a pip stop is worth on a forex position.
Risk/reward ratio explained: the concept behind the number, with chart examples.

Educational only. Not financial advice. NFA. Bullynx is not a registered investment adviser or broker-dealer. Trading and investing involve significant risk of loss. Read the full risk disclosure.