Risk-Reward Ratio Calculator
Every trade plan has two distances in it: how far price can move against you before your stop-loss, and how far it has to travel to reach your target. The relationship between those two distances is the risk-reward ratio, usually written as 1 : R.
A ratio on its own says little. What makes it useful is what it implies about consistency. If a plan risks ₹10 to aim for ₹30, it only needs one trade in four to reach target, with the other three stopped out, to end flat before costs. If it risks ₹10 to aim for ₹5, it needs two trades in three to work just to stand still. That figure is the breakeven win rate, and it is often the most honest number to look at before placing an order.
This calculator handles both directions. For a long trade, the stop-loss sits below entry and the target above. For a short trade, it is the reverse. Enter the three prices and you will see the risk per share, the reward per share, the ratio, and the breakeven win rate.
Use it to study your own plans and to compare setups on paper. It does not judge whether a target is realistic.
How to use this calculator
1. Choose Long if the plan is to buy first, or Short if the plan is to sell first.
2. Enter your planned entry price.
3. Enter your stop-loss: below entry for a long trade, above entry for a short trade.
4. Enter your target: above entry for a long trade, below entry for a short trade.
5. Tap Calculate and read the ratio together with the breakeven win rate.
Worked example
Long: entry ₹500, stop-loss ₹490, target ₹530.
• Risk per share = 500 − 490 = ₹10
• Reward per share = 530 − 500 = ₹30
• Risk : reward = 10 : 30 = 1 : 3
• Breakeven win rate = 10 ÷ (10 + 30) = 25%
Short: entry ₹200, stop-loss ₹206, target ₹188.
• Risk per share = 206 − 200 = ₹6
• Reward per share = 200 − 188 = ₹12
• Risk : reward = 1 : 2
• Breakeven win rate = 6 ÷ (6 + 12) = 33.3%
Frequently asked questions
What is a risk-reward ratio?
It compares the distance from entry to stop-loss (risk) with the distance from entry to target (reward). A ratio of 1 : 2 means the plan aims for twice the amount it risks on each share.
What is the breakeven win rate?
It is the share of trades that must reach target, if every other trade hits its stop-loss, for the results to end flat before costs. It equals risk divided by risk plus reward.
Is a higher ratio always better?
Not by itself. A distant target is usually reached less often, so a higher ratio can come with a lower hit rate. The ratio is a planning check, not a measure of quality.
Is this investment advice?
No. It is an educational calculator. It does not suggest any entry, stop-loss or target. Those decisions stay with you.
Education only. These are educational calculators, not investment advice.
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