Forex Risk/Reward Ratio Calculator
Calculate a forex reward-to-risk ratio from entry, stop and target prices—or enter the stop and target distances directly in pips. The calculator describes the scenario you enter; it does not rate the trade, estimate its probability or guarantee execution.
Scenario inputs
Use three price levels or enter the stop and target distances in pips.
The planned or actual entry used as the reference point.
Below entry for a buy; above entry for a sell.
Above entry for a buy; below entry for a sell.
Positive distance from entry to the entered stop.
Positive distance from entry to the entered target.
Adds stored pip and contract metadata. Choose “No instrument (ratio only)” to omit monetary conversion.
Adds gross stop- and target-distance values in the instrument's quote currency.
Multiplier applied to the selected instrument's stored standard contract.
Scenario geometry
Derived from Reward-to-Risk Scenario model 1.1.0.
How the reward-to-risk calculation works
A forex risk/reward ratio compares the entered target distance with the entered stop distance. Price mode derives both distances from three prices and enforces the selected direction. Pip mode calculates the same ratio directly from two positive pip distances.
Buy reward = Target - Entry
Sell risk = Stop - Entry
Sell reward = Entry - Target
Pip mode multiple = Target pips / Stop pips
Reward-to-risk multiple = Reward distance / Risk distance
Theoretical breakeven win rate = 100 / (1 + Reward-to-risk multiple)
How to read the result
| Output | What it describes | What it does not establish |
|---|---|---|
| 1 : 2.33 | The entered target distance is 2.33 times the entered stop distance. | That the target is likely to be reached or the setup should be traded. |
| 30% before costs | The theoretical win frequency that balances repeated full 1R losses and full 2.33R wins. | A strategy's actual win rate or net breakeven after trading costs. |
| Gross quote-currency values | Price distance multiplied by the entered position quantity. | Account-currency P&L, costs, slippage, swaps or fill certainty. |
A larger multiple is not automatically a better trade. Moving a target farther away changes the geometry but can also change how often the target is reached; this model has no market-probability component.
Assumptions and limits
- The theoretical breakeven rate assumes repeated full losses of 1 risk unit and full wins of the displayed multiple.
- Spread, commission, slippage, financing, gaps, partial exits, early exits and missed fills are excluded.
- A stop price is not a guaranteed execution price. In fast markets, an actual fill can differ from the stop level. See Investor.gov's stop-order bulletin for general execution education; broker and forex order terms vary.
- Optional monetary outputs are gross values in the selected instrument's quote currency, not necessarily the trading account's currency.
- Stored pip sizes and contract quantities are conventional references. Verify the broker's symbol specification, minimum volume and volume step.
- The output is not a stop-placement method, target-placement method, position-size recommendation, trade signal or suitability assessment.
Frequently asked questions
- The calculator divides the entry-to-target price distance by the entry-to-stop price distance. For a buy it uses (target minus entry) divided by (entry minus stop); for a sell it uses (entry minus target) divided by (stop minus entry).
- It means the entered target distance is twice the entered stop distance. It describes price geometry only and does not state that the target is twice as likely, or likely at all, to be reached.
- Yes. Select Pip distances and enter positive stop and target distances. The ratio is target pips divided by stop pips. Selecting an instrument and lot quantity also enables gross quote-currency values from the stored pip and contract specifications.
- It is 100 divided by one plus the reward-to-risk multiple. A 1:2 scenario therefore gives 33.33% before costs, assuming every loss is a full 1R and every win is a full 2R.
- No. Spread, commission, slippage, financing and other execution effects are excluded, so a strategy's net breakeven rate can differ.
- No. Position size scales the optional gross quote-currency values, but the ratio is determined only by the entered price distances.
- A stop level is not a guaranteed fill price. Gaps, fast markets, slippage, spread, broker trigger rules and execution conditions can cause an actual result to differ.
- Yes. The instrument list includes XAU/USD and XAG/USD using stored standard quantities of 100 and 5,000 ounces respectively. Verify the selected broker's contract specification.
- No. A larger target distance raises the displayed multiple but says nothing about the probability of reaching that target. This calculator does not compare strategy quality or recommend a ratio.
Continue your trade workflow
Verify contract and order terms
Before placing an order, check the selected symbol's contract quantity, volume step, stop-trigger method and execution terms for the broker entity available in your jurisdiction.
XM
Verify the symbol specification and order-execution terms that apply to your account.
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