Forex Risk Reward Calculator
Compare your planned risk and potential reward. Enter an entry price, stop loss and take profit to calculate your ratio, pip distances and break-even win rate.
Plan your risk and reward
Compare your stop loss and target before a trade.
Sample prices, not live quotes. Only add costs that are not already reflected in your entry and exit prices.
Risk : Reward
1 : 2
For every 1 USD at risk, you target 2 USD.
Break-even win rate
33.33%
Assumes every trade reaches its stop or target.50 pips to stop loss
100 pips to take profit
- Ratio before costs
- 1 : 2
- Extra costs per trade
- USD 0.00
- Position size
- 10,000 base units
Amounts are estimates in the pair’s quote currency (USD), not converted to your account currency. Gaps, slippage, financing and unentered costs can change the outcome. This ratio does not predict the probability of winning.
How to use the risk reward calculator
- Choose your currency pair and trade direction. The starting prices are examples, not live quotes.
- Enter your planned entry, stop-loss and take-profit prices. A buy requires stop loss below entry and target above it; a sell reverses these levels.
- Enter your lot size to estimate monetary outcomes. Add any extra round-trip cost in the displayed quote currency.
- Review the ratio and break-even win rate alongside your strategy’s tested outcomes. Use the Position Size Calculator to evaluate how much capital a position would risk.
Risk reward ratio formula
This page uses the convention risk : reward. A result of 1:2 means the potential gain is twice the planned loss, before any costs that have not been entered.
Risk distance = |Entry − Stop loss|
Reward distance = |Take profit − Entry|
Reward multiple = Reward distance ÷ Risk distance
Break-even win rate = Risk ÷ (Risk + Reward) × 100
For monetary estimates, each price distance is multiplied by the position’s base-currency units. One standard forex lot is treated as 100,000 units. The result is in the quote currency. A pip is 0.0001 for the listed non-JPY pairs and 0.01 for JPY-quoted pairs.
Worked example: EUR/USD buy
Consider a hypothetical buy at 1.08500, with a stop at 1.08000 and a target at 1.09500. The stop is 50 pips away and the target is 100 pips away.
Risk : reward
1 : 2
Risk at 0.10 lots
USD 50
Potential reward
USD 100
Before costs, this payoff breaks even at a 33.33% win rate under a simplified stop-or-target model. Adding USD 5 in extra costs changes the estimated loss to USD 55 and gain to USD 95: a ratio of approximately 1:1.73 and a break-even win rate of 36.67%.
Risk reward ratios and break-even win rates
This table assumes fixed outcomes at the stop and target, with no extra costs, partial exits or break-even trades. It describes the payoff needed to cover losses, not the probability that a trade will win.
| Risk : Reward | Break-even win rate |
|---|---|
| 1 : 1 | 50% |
| 1 : 1.5 | 40% |
| 1 : 2 | 33.33% |
| 1 : 3 | 25% |
| 1 : 4 | 20% |
Costs, execution and position sizing
The additional cost field applies the same total cost to either outcome: loss plus cost, or gain minus cost. Only add commission, spread or other expenses that are not already reflected in your price inputs. Actual costs may differ between winning and losing trades.
A higher ratio does not establish a profitable strategy. Use historical results to assess win rate, average wins and losses, and execution costs. Stops can fill beyond the requested price, especially during gaps or fast markets.
For further context, see CME Group’s discussion of stop distances, position sizing and reward targets. For execution mechanics, see MetaTrader’s trading principles.
Explore the Forex Profit CalculatorForex Risk Reward Calculator FAQ
Ratios, costs, currency and calculation assumptions.
How do you calculate the forex risk reward ratio?
Divide the distance between entry and take profit by the distance between entry and stop loss. A 50-pip stop and 100-pip target give a risk-to-reward ratio of 1:2 before costs. This calculator writes risk first and reward second.
What is the break-even win rate for a 1:2 ratio?
Before costs, the break-even win rate is 1 ÷ (1 + 2), or 33.33%. This assumes every losing trade loses 1R and every winning trade gains 2R. A higher win rate is needed when additional costs reduce the payoff.
Does a higher risk reward ratio mean a better trade?
No. A distant target can increase the planned reward while being less likely to be reached. The ratio alone does not measure probability, execution quality or strategy profitability.
Can I calculate sell trades?
Yes. Select Sell / Short, place the stop loss above entry and the take profit below entry. Switching direction mirrors the current stop and target around entry; review these prices before using the result.
How do additional costs affect the calculation?
The entered cost is the total extra cost per trade in the pair's quote currency. It is added to the potential loss and subtracted from the potential profit. Only enter costs not already reflected in your prices, so spread or commission is not counted twice.
Which currency are profit and loss shown in?
Money amounts use the pair's quote currency: USD for EUR/USD, JPY for USD/JPY, and GBP for EUR/GBP. They are not converted into your account currency. The risk reward ratio itself is independent of lot size before fixed monetary costs.
Does the calculator use live forex prices?
No. The initial values are editable examples. Enter your planned execution prices. Selecting another pair loads sample prices and resets the additional cost to zero.
Does this include slippage, swap and gaps?
Not automatically. You can enter estimated additional costs, but execution prices, gaps, slippage, overnight financing and broker rules can change the actual result. A stop-loss price does not guarantee a maximum loss.
This calculator is for planning and education. Outputs are estimates, not trading recommendations or guaranteed returns. Check your broker’s contract specifications and execution conditions.