Risk:Reward Calculator
Calculate your risk:reward ratio to ensure every trade has positive expectancy
Risk/Reward Calculator
Calculate your trade's risk-reward ratio
Maximum loss level
Profit target level
Analysis
Pro Tip:
Professional traders aim for a minimum 1:2 risk-reward ratio. This means your potential profit should be at least twice your potential loss.
✓ This trade meets professional standards.
Understanding Risk:Reward Ratios
What is Risk:Reward Ratio?
The risk:reward ratio (R:R) compares how much you're risking on a trade to how much you could potentially gain. A 1:2 ratio means you risk $100 to potentially make $200.
How to Use This Calculator
- Enter Entry Price: Your planned trade entry point
- Enter Stop Loss: Where you'll exit if the trade goes against you
- Enter Take Profit: Your profit target price
- Review Results: See risk in pips, reward in pips, and the R:R ratio
Minimum Risk:Reward Ratios
✅ Excellent: 1:3 or better
Risk $100 to make $300+
✅ Good: 1:2
Risk $100 to make $200 - Minimum for profitable trading
⚠️ Acceptable: 1:1.5
Only if win rate is above 60%
❌ Poor: 1:1 or worse
Avoid these trades - requires 50%+ win rate just to break even
The Math Behind Profitability
With a 1:2 R:R ratio, you only need to win 34% of your trades to break even. Win 40% and you're profitable. This is why professional traders focus on R:R ratios, not just win rates.
Example Calculation
EUR/USD Long Trade:
- Entry: 1.0850
- Stop Loss: 1.0820 (30 pips risk)
- Take Profit: 1.0910 (60 pips reward)
- Result: 1:2 Risk:Reward Ratio ✅
Pro Tip from AI PIPS
Never take a trade with less than 1:2 R:R ratio. Our AI signals are filtered to maintain minimum 1:2 ratios, with most achieving 1:2.5 or better.
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