Risk Reward Calculator
See the reward relative to the risk in your setup.
Trade summary
2.0
33.33%
Direction follows the levels. Put the stop and target on opposite sides of entry.
Calculation details
- Derived direction
- Long
- Gross R:R
- 2.0
- Net risk per unit
- $5,000
- Net reward per unit
- $10,000
Understand the calculation.
Net reward-to-risk = (target profit − entry fee − target-exit fee) ÷ (stop loss + entry fee + stop-exit fee)
A chart target measures price distance. Your account also pays trading costs. Compare the gross reward-to-risk multiple with the fee-adjusted multiple, using the same entry, stop, and target.
How to use the calculator
- Enter the planned entry, stop, and target. Direction is derived from their relationship.
- Place the stop on the loss side and the target on the profit side of entry.
- Enable With fees to choose each order type and enter maker/taker percentages. For example, 0.05 means 0.05%, not 5%.
- Compare gross and net multiples. Then size the trade separately using your risk budget.
Worked example
An entry at $100,000, stop at $95,000, and target at $110,000 imply a long setup with a gross R:R of 2.0. With illustrative maker fees of 0.02%, taker fees of 0.05%, limit entry and target, and a market stop, net risk per unit is $5,067.50 and net reward is $9,958. The ratio becomes about 1.97, with a 33.73% breakeven win rate under a target-or-stop model.
What this calculation assumes
- Results are per underlying unit for a linear instrument. Quantity cancels out of the ratio.
- Entry, stop, and target each use their selected order-type fee assumption. Limit uses maker and market uses taker; a marketable limit can pay taker fees.
- Breakeven assumes every outcome reaches either the exact target or stop. Partial exits, funding, and slippage change realized expectancy.
Educational estimates, not trade recommendations. Actual fills and exchange rules can change outcomes. Money inputs use one consistent quote currency; the $ symbol is an example currency label.
Frequently asked questions
What does a 1:2 risk reward ratio mean?
It means one unit of risk for two units of potential reward. This calculator also shows the reward-to-risk multiple as 2R. Check whether a source writes risk first or reward first.
Is a 2:1 reward-to-risk ratio good?
It cannot tell you by itself. A strategy with a 2R average win and 1R average loss breaks even at a 33.33% win rate before costs. The actual win rate, fees, execution, and outcome distribution matter.
Why can the net reward be negative?
If the price target is too close to cover the modeled fees, reaching it still loses money. The calculator shows that result and does not report a feasible breakeven win rate.
Formula references
Read the reasoning
How to Use a Risk Reward Calculator Before Every Single Trade
Use a risk reward calculator to size trades from entry, stop, target, account risk, and fees before you enter.
From the journalWhy a 2R Trade Can Become 1.6R After Fees
Check how trading fees change position size, net R, and breakeven win rate, with corrected examples for wide and tight stops.
From the journalHow Exchange Fees Affect Your Risk-to-Reward Ratio
Exchange fees reduce net R and increase loss. Use fee-aware position sizing to see your true risk-to-reward ratio before entry.
Keep calculating
Position Size Calculator
Calculate crypto position size from account risk, entry, stop loss, and trading fees. See quantity, notional value, and planned risk. Free, no signup.
Breakeven Win Rate Calculator
Find the win rate needed to break even from average reward, average loss, and trading costs. Compare risk reward ratios with a free calculator.