Risk/reward calculator
A good ratio alone guarantees nothing; it only matters together with the win rate. Enter entry, stop and target and the calculator also gives the minimum share of winning trades you need to break even.
The expectancy assumes the ratio and win rate hold over the long run and ignores commission. A short run of trades confirms nothing statistically.
Frequently asked questions
What ratio counts as good?
Above 1:2 is the common target, but it depends on the strategy. A high win-rate system can work at 1:1, while a trend-following one is profitable at 1:4 with a 30% win rate.
What is the break-even win rate?
The smallest share of winning trades that leaves you flat, calculated as 1/(1+ratio). At 1:2 you need a little over 33%.
What is expectancy?
The average result per trade expressed in multiples of the risk. If it is negative the strategy loses money even when individual trades work out.