Risk / Reward Calculator
Before you enter a trade, know what you’re risking versus what you stand to gain. Enter your entry, stop and target to see your ratio — and the win rate you’d need to break even.
- Risk / shareRs. 20
- Reward / shareRs. 40
- Break-even win rate33.33%
With a 2:1 reward-to-risk ratio you only need to win about 33.33% of trades to break even.
How the ratio works
Your risk is the distance from entry to stop-loss. Your reward is the distance from entry to target. Dividing reward by risk gives your ratio.
Why 1:2 changes everything
With a 1:2 ratio you only need to win about 33% of your trades to break even. Chase setups with a poor ratio and even a high win rate can lose money. The ratio, not just being “right”, is what makes trading profitable.
Break-even win rate explained
The calculator shows the win rate you need to break even at your ratio. A better ratio lowers that bar — which is why professionals obsess over reward-to-risk before entry.
Tips
- Set your target at a realistic level — often just below resistance.
- Place your stop where your idea is proven wrong, not at a random number.
- Pair this with the position size calculator to size the trade.
Frequently asked questions
What is a good risk/reward ratio?
At least 1:2 — risking one to make two — so you can profit even with a sub-50% win rate.
How do you calculate it?
Risk = entry − stop; reward = target − entry; ratio = reward ÷ risk.
More free tools
Test your setups risk-free
Practise entries, stops and targets on StockYatra with 10,000 free virtual coins.
Get the app →