01 Calculator
Long or short is worked out automatically from where your stop and target sit relative to entry. Position size is optional — leave it blank to see the ratio only.
02 What R:R Actually Tells You
A risk/reward ratio (R:R) compares how much you stand to lose if a trade hits your stop-loss to how much you stand to gain if it hits your take-profit. If your stop is $500 away from entry and your target is $1,500 away, you are risking $1 to make $3 — a 1:3 ratio. This calculator normalizes risk to 1 and expresses reward as a multiple of it, the same way most traders read it.
R:R alone does not tell you whether a strategy makes sense. What matters is how R:R interacts with your win rate — the percentage of trades that hit your target instead of your stop. The breakeven win rate above answers one narrow question: given this R:R, what win rate would leave you exactly flat, before fees or slippage? A 1:1 setup needs to win half the time just to break even. A 1:3 setup only needs to win 25% of the time to break even — a lower bar, but still a real one you would have to clear.
A high R:R does not make a strategy work by itself. A 1:5 setup with a 5% real win rate loses money; a 1:1 setup with a 65% real win rate makes money. The breakeven number this calculator gives you is a target, not a guarantee — you still need a large enough sample of real trades to know your actual win rate, and that can only come from testing a strategy, not from typing three prices into a calculator.
03 Breakeven Win Rate By R:R
Computed with the same formula as the calculator above — breakeven win rate = 1 ÷ (1 + R), where R is the reward side of the ratio.
| R:R (reward : risk) | Breakeven win rate |
|---|
04 FAQ
What is a risk/reward ratio?
It compares how much you stand to lose if a trade hits your stop-loss to how much you stand to gain if it hits your take-profit. A 1:3 ratio means you are risking $1 to make $3, whatever your actual position size is.
What is breakeven win rate?
The percentage of trades you would need to win, at a given risk/reward ratio, just to end up flat with no fees or slippage included. It is calculated as 1 divided by (1 + R), where R is the reward side of the ratio. A 1:1 setup needs a 50% win rate to break even; a 1:3 setup needs 25%.
Does a high risk/reward ratio mean a strategy will be profitable?
No. Risk/reward alone says nothing about how often a strategy actually wins. A 1:5 setup with a 5% real win rate loses money, while a 1:1 setup with a 65% real win rate makes money. You need both numbers, and the only way to know your real win rate is to test the strategy.
Do I need an account?
No. This calculator runs entirely in your browser.
Is my data saved or sent anywhere?
No — the numbers you enter never leave your browser. Nothing is saved, logged or transmitted anywhere.
FreeBacktest is an educational tool. Nothing here is investment advice. Past results — real or simulated — do not predict future results.