Risk/reward calculator
Enter your entry, stop loss and target to see the reward-to-risk ratio of a trade, and the win rate you need for that kind of trade to break even.
Reward to risk
1 : 3.00
Good: you only need to be right about 1 in 3 times.
Break-even win rate
25%
before fees
Direction
Long
Risk
$200.00
$2.00 × 100 shares
Reward
$600.00
$6.00 × 100 shares
How it works
- 1Risk = entry − stop loss. Reward = target − entry (the other way around for a short).
- 2Reward-to-risk = reward ÷ risk. Risking $2 to make $6 is 1:3.
- 3Break-even win rate = 1 ÷ (1 + ratio). At 1:3 you need to win 25% of the time to break even; at 1:1, 50%.
- 4A good ratio only helps if the target is realistic. Judge it together with how often that kind of setup actually works.
Questions people ask
How do you calculate the risk/reward ratio?
Divide the distance from entry to target by the distance from entry to stop loss. Buying at $50 with a $48 stop and a $56 target gives $6 ÷ $2 = 3, or 1:3.
What is a good risk/reward ratio?
Many traders want at least 1:2, which breaks even at a 33% win rate. Below 1:1.5 you need to be right most of the time to make money.
Is 1:3 always better than 1:2?
Only if the target is just as realistic. A distant target that rarely gets hit can make a 1:3 trade worse than a 1:2 trade that works more often.
Let Boo plan the trade for you
Upload a screenshot of any chart or type a ticker. Boo reads it and hands you the entry, stop loss, target and position size in seconds. Your first full plan is free.