Complete guide
Risk–Reward Ratio Calculator: formula, example and decision guide
Compare price distance to a stop with price distance to a target. The result updates instantly and keeps every assumption visible.
What the Risk–Reward Ratio Calculator measures
Compare price distance to a stop with price distance to a target.
Use the result to compare scenarios built from the same definitions and time period.
Formula and variables
The calculator applies reward-to-risk = favorable target distance ÷ adverse stop distance. Each variable is entered in a labeled field and remains visible beside the answer.
reward-to-risk = favorable target distance ÷ adverse stop distanceWorked example
A long entry at $100, stop at $95 and target at $112 has 12 reward for 5 risk, or 2.4:1.
Change one input at a time to see which assumption has the greatest effect on the result.
How to interpret the result
Read the main result together with the detailed rows; the headline number alone does not describe every cost, unit or assumption.
Save comparable scenarios with the copy, link, CSV or PDF controls.
Assumptions and limitations
The ratio does not estimate probability, slippage, gaps, fees or whether the target and stop are technically valid.
Real contracts, measurements, platform rules and professional standards can add inputs that this general-purpose model does not infer.
Accuracy checklist
Confirm units, time periods, fees and source figures before relying on the output.
Round the displayed answer only after the calculation; intermediate values retain full precision.
Calculation audit
| Item | What to review |
|---|---|
| Inputs | Position direction, Entry price, Stop price, Target price |
| Equation | reward-to-risk = favorable target distance ÷ adverse stop distance |
| Example | A long entry at $100, stop at $95 and target at $112 has 12 reward for 5 risk, or 2.4:1. |
| Limit | The ratio does not estimate probability, slippage, gaps, fees or whether the target and stop are technically valid. |
Frequently asked questions
What does this Risk–Reward Ratio Calculator calculate?
Compare price distance to a stop with price distance to a target.
Which formula does it use?
reward-to-risk = favorable target distance ÷ adverse stop distance
Does it calculate while I type?
Yes. Valid changes update the result automatically without reloading the page.
Which inputs should I verify?
Verify every unit, period, rate and fee against the source you are modeling.
Is the result exact?
The ratio does not estimate probability, slippage, gaps, fees or whether the target and stop are technically valid.
Can I save or share the result?
Yes. Copy, native sharing, WhatsApp, PDF/Print, CSV, comparison and parameterized links are available.
What to keep in mind
The ratio does not estimate probability, slippage, gaps, fees or whether the target and stop are technically valid.
Results display up to 8 decimal places; exported numbers preserve calculation precision. This is a calculation summary, not an official certificate.