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Risk/reward ratio calculator

Compute the risk/reward ratio of a trade from entry, stop-loss and target prices.

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The Risk/reward ratio calculator turns Entry price, Stop-loss price, Target price into Reward-to-risk ratio (× risk), Risk per unit, Reward per unit, instantly and for free. For instance, with Entry price = $100.00, Stop-loss price = $90.00 and Target price = $130.00 it returns Reward-to-risk ratio (× risk) = 3, Risk per unit = $10.00 and Reward per unit = $30.00.

How to use it

  1. Enter your values: Entry price, Stop-loss price, Target price.
  2. Read the result instantly: Reward-to-risk ratio (× risk), Risk per unit, Reward per unit.

Frequently asked questions

How does the Risk/reward ratio calculator work?

It takes Entry price, Stop-loss price and Target price and derives Reward-to-risk ratio (× risk), Risk per unit and Reward per unit from them. The calculation is live as you type, so the result updates on every change.

Which values does the calculator ask for?

3 values: Entry price ($), Stop-loss price ($) and Target price ($). Nothing else is required — no account, no file upload.

What does a typical calculation look like?

With Entry price = $100.00, Stop-loss price = $90.00 and Target price = $130.00, the calculator returns Reward-to-risk ratio (× risk) = 3, Risk per unit = $10.00 and Reward per unit = $30.00. Those figures come from running this exact tool, so you can reproduce them by entering the same values.

How much does the result change with different inputs?

It moves a lot. Using Entry price = $200.00, Stop-loss price = $180.00 and Target price = $260.00 instead, Risk per unit goes from $10.00 to $20.00 — which is why it is worth testing a few scenarios rather than trusting a single figure.

What does it give for smaller values?

Scaled down to Entry price = $50.00, Stop-loss price = $45.00 and Target price = $65.00, Risk per unit comes out at $5.00. The relationship is worth checking at both ends before you rely on a single result.

When would I actually use this?

Comparing two investments that pay at different times, deciding whether a project clears its cost of capital, and sanity-checking a valuation someone else produced.

What is the most common mistake?

Trusting a valuation without asking what share of it comes from the terminal value. Past 70%, the answer is an assumption about the distant future dressed up as a calculation.

How accurate is it, and what are the limits?

Estimate only — not financial advice.

What is the difference between the Risk/reward ratio calculator and the Sharpe ratio calculator?

This one returns Reward-to-risk ratio (× risk) and Risk per unit; the Sharpe ratio calculator returns Sharpe ratio and Volatility (annualised). That is the whole difference — open the one whose figure you need.

Is there a tool for the next step?

Treynor ratio calculator is the closest one after this: The Treynor ratio measures excess return per unit of systematic (market) risk. It divides the portfolio's return above the risk-free rate by its beta — unlike the Sharpe ratio, which uses total volatility. Higher is better, and it is ideal for ranking well-diversified portfolios whose only real risk is market exposure.

Further reading

All guides →
ExplainerRisk/Reward Ratio Explained: The Win Rate Each Ratio RequiresA 1:3 ratio does not make you right more often — it lets you be wrong three times out of four and still break even. Here is the inversion, a table of ratio against required win rate, and what costs do to both.GuideWhere to Set a Stop-Loss and a Take-ProfitThe stop goes where your idea is wrong, not where your comfort runs out — and then the position size adapts to it. Here is the volatility argument, the sizing arithmetic, and the win rate each reward multiple demands.GuidePosition Sizing: What the 1 Percent Rule Actually ConstrainsThe rule caps the loss, not the position. Here is the formula, a worked example, and what a run of ten losses costs at 1 percent versus 2 percent.ExplainerThe Sortino Denominator Nobody Agrees OnOn one twelve-month series the Sortino ratio is 7.7518 or 3.8759 depending only on whether the squared shortfalls are divided by all twelve months or by the three below target. The two conventions differ by exactly the square root of twelve over three, and they can rank two funds in opposite orders.ExplainerVolatility Is Not Risk, and the Square Root of Time Is a ChoiceAnnualised volatility = period standard deviation × √(periods per year), and that √t scaling assumes independent increments. It is a model, not arithmetic: at a daily autocorrelation of 0.1 a 60 percent annualised figure should read 66.3. The payload is volatility drag — the arithmetic mean exceeds the geometric by about σ²/2, so at 8 percent average return and 40 percent volatility the compound outcome is zero.ExplainerThe Sharpe Ratio, and What It Quietly AssumesSharpe = (return − risk-free) ÷ standard deviation, so it prices return per unit of volatility — and volatility is symmetric. Two funds can share a Sharpe of 0.4939 while their Sortino ratios are 8.59 and 0.74. Annualising by √12 assumes independent returns: at an autocorrelation of 0.2 the published figure is 20 percent too high.