Risk / Reward Ratio Calculator + Break-Even Win Rate

A ratio without a win rate says nothing

A 1:3 setup looks attractive until you check how often it actually hits. Risk $100 to make $300, take twenty trades, and win four of them: you make $1,200 and lose $1,600. Net −$400, on a ratio most people would call excellent. The ratio alone tells you nothing about whether the setup makes money.

Break-even is the real number

The break-even win rate is where expected value reaches zero — the formula is 1 / (1 + ratio). A 1:3 setup needs 25%. A 1:2 setup needs 33%. A 1:1 setup needs 50%. The four-in-twenty example above is a 20% win rate against a 25% requirement, which is why it loses. That single number is the constraint a good ratio has to clear.

This calculator surfaces the trade-off

Three outputs. First, risk and reward in dollars or points from your entry, stop-loss and target, so you see the real amounts rather than a ratio. Second, the break-even win rate that ratio demands. Third, the expected value per trade given the win rate you enter: EV = (win rate × ratio) − (1 − win rate). A 1:2 ratio at a 40% win rate gives +0.8R per trade. The same ratio at 30% gives −0.4R. Ten percentage points of win rate flips the setup from profitable to losing.

What stays out of scope

No position sizing, slippage, commissions, funding costs, or the real distribution of outcomes. This is expected value in a vacuum — a floor to clear, not a full risk model. It assumes each trade is independent and that your win rate holds steady, whereas real results arrive in streaks. See also the Drawdown Recovery Calculator and the Sharpe Ratio Calculator.