โ๏ธ Risk/Reward Ratio Calculator
The risk/reward ratio compares the distance to your target with the distance to your stop. It also tells you how often a strategy would need to win just to break even.
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How to use the risk/reward ratio calculator
- Enter entry, stop-loss and target prices.
- Choose long (buy) or short (sell).
- Read the reward-to-risk ratio and the break-even win rate.
Strategies that use this tool
Trend Following (Moving-Average Crossover)
Trend following with moving-average crossovers aims to ride sustained price trends and step aside when they fade. A fast average crossing above a slow average signals a possible uptrend, and crossing below signals weakness.
๐งฒMean Reversion with RSI
Mean reversion bets that prices which stretch too far from normal tend to snap back toward their average. The RSI helps spot when a market looks short-term oversold or overbought.
๐ฅBreakout Trading
Breakout trading looks for price escaping a well-defined range or level, aiming to catch the start of a new move. Strong volume on the break can suggest real conviction behind it.
๐Swing Trading
Swing trading aims to capture short to medium price swings that last a few days to a few weeks. It sits between fast day trading and slow long-term investing, using charts to time entries and exits.
Frequently asked questions
What is a good risk/reward ratio?
Many traders look for 1:2 or better, but the ratio only matters together with how often a setup works.
What is the break-even win rate?
It is the % of trades you must win to not lose money at this ratio, before fees.
Does a high ratio mean a good trade?
No. Far targets are hit less often. Ratio and win rate must be judged together.