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Risk / Reward Calculator

Plug in your entry, stop, and target. Get the R:R ratio and breakeven win rate before committing to a setup.

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How risk / reward works

Risk / reward is the ratio of how much a trade can lose to how much it can win. If your stop is 10 points away and your target is 30 points away, the R:R is 3:1 — three units of potential reward for every one unit of risk. The number alone doesn't make a trade good or bad — it tells you the win rate you need.

Breakeven win rate

For any R:R, there's a minimum percentage of trades you need to win, long-run, just to break even (ignoring fees). The formula:

breakeven win rate = 1 / (1 + R:R)

  • 3:1 setup → 25% breakeven (a coin-flip win rate makes serious money)
  • 2:1 setup → 33% breakeven (most discretionary traders aim here)
  • 1:1 setup → 50% breakeven (you must beat a coin flip)
  • 0.5:1 setup → 67% breakeven (very hard to sustain)

When R:R is misleading

A 5:1 setup is meaningless if your win rate is 10%. A 1:1 setup is great if you win 60% of the time. R:R only tells you the breakeven floor — your actual edge is win rate × R:R. Verify your historical win rate against the R:R range you trade before relying on this number.

Pair this with the calculator suite

R:R tells you whether the setup is worth taking. The Position Size calculator tells you how many contracts to trade once it is. The Contract Specs Lookup fills in the multipliers.

Open Position Size calculator

R:R alone doesn't qualify a trade — combine it with your historical win rate and current market context.

MiyagiTrades tools are provided for educational and informational purposes only. They do not provide financial advice, trading signals, brokerage services, or trade execution. Verify all calculations against your broker, exchange, or trading platform before placing trades.