Risk Reward Calculator — R:R Ratio for Any Trade

Most professional forex traders target a minimum R:R of 1:1.5 or 1:2. At 1:2, you only need to win 33% of your trades to break even. At 1:3, you only need a 25% win rate. The higher the R:R, the fewer trades you need to win — but higher R:R targets are also harder to hit, since take profits are further away.

A 1:2 risk reward ratio means you are risking 1 unit to potentially gain 2 units. For example, if you risk $100 (your stop loss distance in dollar terms), your take profit target would give you $200 if hit. You only need to win 33.3% of your trades with this ratio to be profitable.

The formula is: Break-even win rate = 1 ÷ (1 + R:R ratio). For a 1:2 ratio: 1 ÷ (1 + 2) = 0.333 = 33.3%. For a 1:1 ratio: 1 ÷ (1 + 1) = 50%. The lower your win rate requirement, the more resilient your trading strategy is to losing streaks.

Not necessarily. A very high R:R ratio (like 1:5) means your take profit is far from your entry, which reduces the probability of it being hit. The optimal R:R depends on your trading strategy. Scalpers typically use 1:1 to 1:2 with high win rates. Swing traders often target 1:3 or higher with lower win rates. What matters most is that your expected value (win rate × reward − loss rate × risk) is positive.

This calculator does not account for spread or commission, which is intentional — it calculates the theoretical R:R from your exact price levels. In practice, you should factor in your broker's spread (typically 0.5–2 pips for major pairs) which effectively increases your risk and decreases your reward. For a more accurate calculation, add the spread to your stop loss distance.

To achieve a 1:2 R:R, your take profit needs to be twice as far from your entry as your stop loss. For example, if your stop loss is 30 pips below your entry (long trade), place your take profit 60 pips above your entry. Use support and resistance levels to find natural stop loss placement first, then look for a take profit level that is at least 1.5–2× that distance away.