How the Risk & Reward Calculator works
The CleaRank Risk Reward Calculator turns three prices, entry, stop, and target, into a risk-to-reward ratio you can see at a glance. It plans trades in R-multiples, supports multiple take-profit targets, and shows the whole setup on a visual bar so lopsided trades are obvious before you take them.
Open the Risk & Reward Calculator
How much you stand to make for what you risk
Risk is the distance from your entry to your stop-loss. Reward is the distance from your entry to your take-profit target. The ratio between them is your R:R. In plain words: R:R = (target minus entry) divided by (entry minus stop) for a long trade, with the differences flipped for a short. A 1:2 ratio means every unit of risk buys two units of potential reward, so one winner pays for two losers.
Worked example. Long at 1.2500 with a stop at 1.2450 and a target at 1.2600. Risk = 1.2500 – 1.2450 = 50 pips. Reward = 1.2600 – 1.2500 = 100 pips. R:R = 100 / 50 = 1:2. On a 10,000 USD account risking 2% (200 USD), the target pays 400 USD, a 2R winner.
Entry, stop, and target
- Pick a Quick Template (optional). Conservative (1% risk, 1:3 R:R), Moderate (2%, 1:2), Aggressive (3%, 1:1.5), or Scalp (0.5%, 1:1). Templates prefill the risk settings; you can adjust anything afterward.
- Direction and Instrument. Choose Long or Short, then search a symbol (AAPL, EUR/USD, BTC/USD and so on).
- Account Balance and Risk per Trade (%). These translate the ratio into actual money at risk and money at target.
- Entry Price and Stop-Loss Price. The two prices that define 1R, your unit of risk.
- Take-Profit Targets. Enter TP1 with a % of Position, and click Add Target for scaled exits, for example 50% off at 1:1 and the rest at 1:3. The calculator shows the blended ratio.
- Result. The R:R ratio with a visual bar comparing the risk and reward legs, plus win-rate sensitivity so you can see what hit rate the setup needs.
Thinking in R-multiples
Once risk is defined, every outcome can be measured in R: a trade that makes twice its risk is +2R, a full stop-out is -1R. This normalizes results across instruments and position sizes, and it is how the simulator’s Performance tab buckets your closed trades in its R-multiple histogram. Planning trades here in R keeps your journal statistics meaningful later.
There is also a free public version of this tool at clearank.com/tools/risk-reward-calculator/ if you want to run a quick ratio without opening the dashboard.
When a risk-reward check saves a trade
- Before entry, to reject setups where the target does not justify the stop distance.
- When planning scaled exits across multiple take-profit levels.
- Together with the Breakeven Win Rate Calculator: your R:R determines the minimum win rate the strategy needs.
- From the R:R chip above the simulator chart, prefilled with the chart symbol and live price.
Frequently asked questions
How do I calculate risk reward ratio?
Divide the distance from entry to target by the distance from entry to stop. Example: entry 1.2500, stop 1.2450, target 1.2600 gives 100 pips of reward against 50 pips of risk, a 1:2 risk-to-reward ratio.
What is a good risk to reward ratio?
It depends on your win rate. 1:2 or better is a common target because it stays profitable even below a 50% win rate: at 1:2 you break even at about 33%. High-win-rate scalping styles can work at 1:1, but they leave far less room for error.
What is an R-multiple?
Your result measured in units of initial risk. If you risked 200 USD and made 400 USD, that is +2R; a full stop-out is -1R. R-multiples make trades comparable across different instruments and position sizes.
Can I plan multiple take-profit targets?
Yes. Use Add Target to define several take-profit levels, each with its own percent of the position. The calculator computes the blended risk-to-reward for the whole exit plan, not just the first target.
Try it yourself
See the shape of the trade before you take it.
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CleaRank tools are for education and analysis. Nothing in this guide is financial advice.