OptiNod Tools
Risk:Reward and Expectancy Calculator
Calculate risk:reward from entry, stop, and target prices, and the expectancy per trade in R from win rate, average win, and cost. Calculations run only in your browser.
Calculate the risk:reward of a planned trade from its entry, stop, and target, then the average result per trade for a win rate and average win you assume. Calculations run only in this browser, and the numbers you enter are not sent to a server.
This tool calls the planned loss size 1R (R is commonly short for risk). With an entry of 100 and a stop at 95, 1R is a price move of 5, and a target at 110 sits 2R from the entry.
The calculator needs JavaScript. The formulas and worked examples on this page can be read without it.
Risk:reward
Compares the price distance from entry to stop with the distance from entry to target.
Formula Long: risk = entry − stop, reward = target − entry. Short: risk = stop − entry, reward = entry − target. Risk:reward = reward ÷ risk.
Assumptions Only the linear price distance is calculated. Fees, funding, slippage, gap fills, inverse (coin-margined) contracts, and currency conversion are not included, so the result can differ from the profit or loss on an account.
Expectancy
The average result per trade in a model with only two outcomes: an average win of bR or a loss of 1R.
Formula E[R] = p × b − (1 − p) − c; breakeven win rate = (1 + c) ÷ (1 + b). p is the win rate, b the average win in R, and c the cost per trade in R. When the averages already include costs, c is 0.
Assumptions The average loss is 1R, every trade ends as either a win or a loss, and the cost is the same on every trade. Breakeven trades, or costs that differ by outcome, are outside this model. Expectancy is the average over many repetitions of the same trade; it is not a profit target, a guaranteed return, or a risk of ruin.
Worked examples
- Long: entry 100, stop 95, target 110 → risk 5, reward 10, risk:reward 2
- Short: entry 100, stop 105, target 90 → risk 5, reward 10, risk:reward 2
- Win rate 40%, average win 2R, cost 0.1R → expectancy +0.1R per trade, breakeven win rate about 36.67%
- With the same 2R average win and no cost, the breakeven win rate is about 33.33%.
Price distances are shown with as many decimal places as the most precise price entered. Risk:reward, R values, and win rates are rounded to two decimal places. Calculations use the unrounded values.
The results are arithmetic on the assumptions you enter. They are not a recommendation to buy, sell, or use leverage, and they do not predict or guarantee future returns.