Risk/Reward Calculator
Win Rate & Expectancy
Discover the hidden math behind profitable trading. See exactly what win rate you need to be profitable with any risk/reward ratio.
Did you know? With a 1:2 risk/reward ratio, you only need a 33.3% win rate to be profitable.
SWINGFOLIO
My Trading Edge
+0.35R
per trade
45%
Win Rate
2R
Avg Win
1.6
Profit Factor
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Expectancy Per Trade
+0.35R
(+0.35% per trade)
Your system has a positive edge!
+2.80% account
You're 11.7% above breakeven
Good edge
55% loss rate
Avg Win
+2.0R
Avg Loss
-1.0R
Key Insight
You're profitable despite a 45% win rate because your winners are 2.0x larger than your losers. This is the hallmark of trend-following.
Hover over a cell to see the expectancy for that combination
| Win Rate ↓ / R:R → | 1:0.5 | 1:1 | 1:1.5 | 1:2 | 1:2.5 | 1:3 | 1:4 | 1:5 |
|---|---|---|---|---|---|---|---|---|
| 25% | -0.63 | -0.50 | -0.38 | -0.25 | -0.13 | 0.00 | +0.25 | +0.50 |
| 30% | -0.55 | -0.40 | -0.25 | -0.10 | +0.05 | +0.20 | +0.50 | +0.80 |
| 35% | -0.48 | -0.30 | -0.13 | +0.05 | +0.22 | +0.40 | +0.75 | +1.10 |
| 40% | -0.40 | -0.20 | +0.00 | +0.20 | +0.40 | +0.60 | +1.00 | +1.40 |
| 45% | -0.33 | -0.10 | +0.13 | +0.35 | +0.57 | +0.80 | +1.25 | +1.70 |
| 50% | -0.25 | 0.00 | +0.25 | +0.50 | +0.75 | +1.00 | +1.50 | +2.00 |
| 55% | -0.17 | +0.10 | +0.38 | +0.65 | +0.93 | +1.20 | +1.75 | +2.30 |
| 60% | -0.10 | +0.20 | +0.50 | +0.80 | +1.10 | +1.40 | +2.00 | +2.60 |
| 65% | -0.02 | +0.30 | +0.63 | +0.95 | +1.27 | +1.60 | +2.25 | +2.90 |
| 70% | +0.05 | +0.40 | +0.75 | +1.10 | +1.45 | +1.80 | +2.50 | +3.20 |
The "Aha" Insight
Notice how the diagonal line separates profit from loss. With a 1:2 R:R, you only need 33.3% win rate to break even. With 1:3 R:R, just 25%!
Risk/Reward Ratio and Win Rate Explained
How to read the calculator, with a worked example and the breakeven win rate for common risk/reward ratios.
How to read your result
Expectancy per trade is the average result of one trade in R. Above 0R, the inputs make money on average. At or below 0R, they lose money on average, however often you win.
Breakeven win rate is the win rate at which your risk/reward ratio makes exactly 0R. If your real win rate is below it, the system loses money before costs.
Monthly figures multiply expectancy by your trades per month and your risk per trade. They are averages, not a forecast. Individual months vary, and a short run of losses can put any month below zero.
The results are only as good as the inputs. Use the win rate and average win and loss from your own closed trades, not from your plan.
Worked example: 40% win rate at 1:2
You win 40% of your trades. Each winner makes 2R and each loser costs 1R, so your risk/reward ratio is 1:2.
Expectancy = (win rate × avg win) − (loss rate × avg loss)
= (0.40 × 2R) − (0.60 × 1R)
= 0.8R − 0.6R = +0.2R per trade
If 1R is $100, that is an average of $20 per trade before costs. Over 100 trades the expected total is +20R, or $2,000.
The breakeven win rate at 1:2 is 33.3%, so a 40% win rate sits 6.7 percentage points above it. If your win rate fell to 30%, the same ratio would give (0.30 × 2R) − (0.70 × 1R) = −0.1R per trade.
Breakeven win rate by risk/reward ratio
Breakeven win rate = 1 ÷ (1 + R), where R is the average win divided by the average loss. Figures are before brokerage, spreads and slippage, which raise each one.
| Risk/reward ratio | Breakeven win rate | Breakeven wins per 10 trades |
|---|---|---|
| 1:1 | 50.0% | 5.0 |
| 1:1.5 | 40.0% | 4.0 |
| 1:2 | 33.3% | 3.3 |
| 1:3 | 25.0% | 2.5 |
| 1:4 | 20.0% | 2.0 |
| 1:5 | 16.7% | 1.7 |
Related tools and guides
- Position size calculator
Work out how many shares to buy so a stop out costs exactly 1R.
- Breakeven win rate after trading costs
How brokerage, spreads and slippage move the breakeven figures in the table.
- Why a high win rate can still lose money
What happens when the average loss is larger than the average win.
- Win rate vs profit factor
How the two numbers relate and what each one tells you.
- Understanding R-multiples
Measure every trade against the amount you planned to risk.
- Win rate needed at each risk/reward ratio
A lookup table of breakeven and target win rates from 1:1 to 1:5.
Frequently asked questions
What win rate do I need to be profitable?
It depends on your risk/reward ratio. Before costs, the breakeven win rate is 1 divided by (1 + R), where R is your average win divided by your average loss. At 1:1 you need 50%, at 1:2 you need 33.3%, at 1:3 you need 25%, and at 1:4 you need 20%. Fees, spreads, and slippage raise each of these figures.
How do I use this as a win rate calculator?
Enter your average win and average loss in R. The breakeven win rate in the results is the lowest win rate at which that risk/reward ratio stops losing money, before costs. Compare it with your actual win rate from at least 30 closed trades. The gap between the two shows how far your win rate can fall before the system stops making money.
How do I calculate a risk reward ratio?
Divide the distance from your entry to your target by the distance from your entry to your stop loss. A buy at $50.00 with a stop at $48.00 and a target at $56.00 risks $2.00 per share to make $6.00, which is a risk/reward ratio of 1:3. The position size calculator then works out how many shares to buy for that stop.
What does a risk reward ratio of 1:2 mean?
It means your target profit is twice the amount you risk. Risking $100 to make $200 is 1:2. Before costs, a 1:2 ratio breaks even at a 33.3% win rate, so 4 wins in 10 trades returns +2R in total: (4 × 2R) minus (6 × 1R).
What is an R-multiple?
An R-multiple measures a trade's profit or loss against the amount you planned to risk, called 1R. If you risk $100 and make $200, that is a 2R win. If you lose $100, that is a -1R loss. R-multiples let you compare trades of different position sizes.
What is trading expectancy?
Expectancy is the average result per trade, measured in R. The formula is (win rate × average win in R) minus (loss rate × average loss in R). A positive number means the trades you measured made money on average. A negative number means they lost money on average.
Can I be profitable with a low win rate?
Yes, if your average win is large enough. A 30% win rate at 1:3 gives (0.30 × 3R) minus (0.70 × 1R), which is 0.9R minus 0.7R, or +0.2R per trade before costs. The tradeoff is losing streaks: at a 30% win rate, runs of 8 or more losses in a row are likely over a few hundred trades.
How many trades do I need for reliable statistics?
Treat 30 trades as a rough first read, 50 to 100 trades as a usable sample, and more than 100 trades for higher confidence. Results from one market condition may not hold in another, so check your figures again when conditions change.
What is a good profit factor?
A profit factor below 1.0 means the system lost money. From 1.0 to 1.25 the edge is thin and costs can remove it. From 1.25 to 1.5 the edge is modest, and from 1.5 to 2.0 it is solid. A profit factor above 3.0 on fewer than 100 trades often points to a small sample or an overfitted strategy.
Why is my average loss greater than 1R?
Overnight gaps can open a stock below your stop, and fast markets can fill your order at a worse price. Moving or widening a stop, or adding to a losing position, also makes the loss larger than planned. Enter your real average loss in R in the calculator, not the planned 1R.
Understanding Risk/Reward & Expectancy
Master the math behind profitable trading systems
R-Multiple
A way to measure profit/loss relative to your initial risk. If you risk $100 and make $200, that's a 2R win. If you lose $100, that's a -1R loss. This standardizes results regardless of position size.
R = Profit or Loss / Initial Risk
Expectancy
Your average expected profit per trade. Positive expectancy means you'll make money over many trades. This is the single most important metric for evaluating a trading system.
E = (Win% × Avg Win R) - (Loss% × Avg Loss R)
Profit Factor
Ratio of gross profits to gross losses. Above 1.0 means profitable. Above 1.5 is good. Above 2.0 is excellent.
PF = (Win% × Avg Win) / (Loss% × Avg Loss)
Focusing only on win rate
Win rate means nothing without considering R:R. A 70% win rate with 1:0.5 R:R is a losing system.
Cutting winners too early
Your average win R-multiple drops. Let winners run to maintain your edge.
Moving stop losses
This inflates your average loss R beyond 1R, destroying your edge. Honor your stops.
Not tracking enough trades
You need 30-100 trades minimum for statistically meaningful results. Small samples are misleading.
Ignoring slippage and gaps
Your actual average loss is often higher than 1R due to gaps. Factor this into your calculations.
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Track Your Real R-Multiples
This calculator shows what's possible. Swingfolio shows what's actually happening with your trades - track every R-multiple automatically.
R-Multiple Tracking
Every trade automatically calculates your R-multiple from entry, stop, and exit
Expectancy Analytics
See your real win rate, avg R, and expectancy across all strategies
AI Insights
Get personalized recommendations to improve your edge