Tool

Risk reward calculator

The ratio is division, and every page divides correctly. The number that matters is the one the ratio implies: the break-even win rate — below it, a strategy at this ratio loses money whatever its ratio looks like. This computes both, then computes them again with the round trip included, because costs shave every win and pad every loss, and a ratio quoted from chart distances alone is always a little better than the one your statement settles at.

R:R, costs included—

R:R from the chart distances—

R:R after the round trip—

Break-even win rate, chart distances—

Break-even win rate, costs included—

This computes in your browser and needs JavaScript. The arithmetic: the ratio is target distance over stop distance. The break-even win rate at ratio R is 1 divided by (1 + R). With a round trip of c pips, every win pays the target minus c and every loss costs the stop plus c — recompute the ratio on those two figures and the break-even moves up. The gap between the two break-evens is what costs demand of your hit rate.

The break-even line, and which side is which

At a ratio of R, a strategy breaks even when it wins exactly 1 in (1 + R) trades — win more often and the expectancy is positive, less often and no ratio rescues it. That single line is what the ratio is for: it converts a chart habit into a testable claim about a hit rate. The claim then needs a measured win rate to test against, and a win rate is an estimate from a sample — sixty trades cannot pin a hit rate to a point, which is why the comparison belongs beside the risk of ruin calculator's interval machinery rather than inside a single confident sentence.

Why costs move the line one way only

The round trip subtracts from the win and adds to the loss — both at once. A fifty-pip target with a two-pip round trip pays forty-eight; a twenty-five-pip stop costs twenty-seven. The quoted two-to-one is actually about 1.8 to one, and the break-even win rate rises accordingly. The tighter the trade, the harsher the arithmetic: at scalping distances the round trip can consume the edge entirely, which is a fact about division rather than a warning about scalping. Enter your round trip above and both lines are priced; leave it empty and the panel says the figures are geometric rather than pretending costs are zero.

What this does not do

It does not know how often price reaches your targets — a ratio is a property of two distances you chose, not of the market, and improving the ratio by stretching the target is free on this page and expensive in life, because further targets get hit less often. Whether your actual hit rate at these distances clears the break-even line is a measurement question that needs your record, its sample size, and the honesty to count the trades that were neither win nor loss.

Turning the stop distance into a position that risks what you agreed is the position size & lot size calculator; pricing the pips in money is the pip value calculator; and whether a record's win rate can carry a given sizing at all is the risk of ruin calculator. The full list is under calculators. And when the inputs cannot support an answer, the panel above refuses and says why rather than rendering a zero — why an instrument refuses to answer is that design, written down.