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Risk Reward Ratio Calculator

Size up a trade before you take it. Enter your entry, stop and target to see the risk reward ratio, the win rate you need to break even and how many shares to buy, then press Calculate.

Written by TopicDrill Editorial Team·Updated June 2026

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Trade setup

Enter your prices, then press Calculate.

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Risk / reward ratio

1 : 3.00

Long trade · break-even win rate 25.0% · 50 shares

Risk per share$5
Reward per share$15
Max loss at stop$250
Max gain at target$750

Expected profit per trade by win rate

Profit Loss
$650$325$0$-325$-65010%20%30%40%50%60%70%80%90%

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How the risk reward calculator works

Every trade has two distances that matter: how far the price can move against you before your stop loss closes the position, and how far it can move in your favor before it reaches your target. The first is your risk per share, the second is your reward per share, and the risk reward ratio simply divides one by the other. The tool detects whether the setup is long or short from where the stop sits relative to the entry.

Because no edge wins every time, the ratio is only half the story. The chart plots the expected profit per trade across a range of win rates, so you can see the point where a strategy flips from losing to winning over many repetitions. The break-even win rate is where that line crosses zero.

A worked example

Buy at 100 dollars with a stop at 95 and a target at 115. Risk per share is 5 dollars, reward per share is 15 dollars, so the ratio is 1 to 3. The break-even win rate is just 25 percent. Risking 1 percent of a 25,000 dollar account means a 250 dollar risk, which divided by the 5 dollar risk per share allows 50 shares, putting roughly 5,000 dollars to work for a 750 dollar potential gain.

Things to keep in mind

The ratio ignores commissions, slippage and the chance the price gaps past your stop, all of which erode real results. A favorable ratio is no guarantee the target gets hit. For a primer on managing trading risk, see Investor.gov. To project the growth of profits you keep, pair this with our future value calculator.

Frequently asked questions

What is a good risk reward ratio?

Many traders look for at least 1 to 2, meaning the potential reward is twice the amount risked. A higher ratio lets you be profitable even when you lose more trades than you win, but it usually means a more distant target that is hit less often. The right ratio depends on how reliable your setup is.

How is the risk reward ratio calculated?

Risk per share is the distance from your entry to your stop loss. Reward per share is the distance from your entry to your target. The ratio is the reward divided by the risk. For example, risking 5 dollars to make 15 dollars is a ratio of 1 to 3.

What win rate do I need to break even?

The break-even win rate is 1 divided by the quantity 1 plus the reward to risk ratio. At a 1 to 2 ratio you need to win about 33 percent of trades just to break even, before costs. The calculator shows this figure so you can judge whether your strategy clears the bar.

How does this size my position?

Enter your account balance and the percentage you are willing to risk per trade. The tool turns that into a dollar risk amount, then divides it by the risk per share to find how many shares to buy so a stop-out costs no more than your chosen risk.

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