Risk Reward Ratio Calculator
Estimate trading profits, losses, fees, and final account balance using 1:1, 1:2, 1:3, 1:4, and 1:5 risk-to-reward ratios. Adjust your win rate and trade settings for an instant comparison.
Trade Settings
Risk-to-Reward Comparison: 1:1 vs 1:2 vs 1:3 vs 1:4 vs 1:5
| Ratio | Stop Loss | Take Profit | Break-even Win Rate | Total Fees | Net P/L | Final Balance |
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Estimates assume a fixed dollar stop loss and target, constant fee per completed trade, and no compounding. Fees are modeled as flat dollar amounts. Actual fees often depend on notional position size rather than margin. Results exclude spread, slippage, funding, and taxes. The same win rate may not be achievable at every reward ratio. Final balance is hypothetical and does not model early account depletion or margin restrictions.
How to Use This Risk Reward Calculator
Enter your starting trading capital, planned stop loss in dollars, number of trades, amount allocated per position, and trading fee in dollars. Move the win-rate slider to compare potential outcomes across five risk-to-reward ratios. The calculator estimates winning trades, losing trades, total trading fees, net profit or loss, and ending balance.
Understanding Risk-to-Reward Ratios
A 1:2 risk-to-reward ratio means targeting $2 of profit for every $1 at risk. At 1:5, you target $5 for every $1 risked. A higher reward target requires a lower theoretical break-even win rate, but may be harder to hit consistently.
Frequently Asked Questions
What is the break-even win rate for 1:1, 1:2, 1:3, 1:4, and 1:5?
Before trading costs, the theoretical break-even win rates are 50%, 33.33%, 25%, 20%, and 16.67%, respectively. Fees increase these thresholds.
Does the calculator include trading fees?
Yes. Enter a flat dollar fee charged per trade. This is a simplified fee model; check whether your broker calculates fees on margin, notional value, contracts, or lots.
Does higher risk-to-reward guarantee more profit?
No. Profitability depends on actual win rate, execution costs, trade frequency, drawdown, and whether your strategy reaches its profit targets.