Analyze trade setups to determine optimal risk vs. reward. Calculate minimum win rates and potential profitability instantly.
Calculate risk/reward ratios for both long and short positions. Determine minimum win rates needed for profitability, and analyze trade setups.
Current position: LONGBuy low, sell high
Set BELOW entry price (loss if price falls here)
Set ABOVE entry price (profit if price reaches here)
Profit Condition:
Price moves UP ↗️
Loss Condition:
Price moves DOWN ↘️
Risk (Stop Loss)
$5.00
Price: $95
Entry Price
$100
LONG
Reward (Take Profit)
$10.00
Price: $110
Risk/Reward Ratio: 2.00:1
For every $1 risked, you stand to gain $2.00
✅ Take Profit at $110 would be PROFITABLE for this long position
Risk Amount
5.00 $
Amount at risk if stopped out
❌ Loss
Reward Amount
10.00 $
Potential profit at take profit
✅ Profit
Risk/Reward Ratio
2.00 :1
Risk to reward
Stop Loss Distance
5.00 %
Percentage from entry
Take Profit Distance
10.00 %
Percentage from entry
Min Win Rate Needed
33.33 %
For profitability
✅ Excellent Risk/Reward! This trade setup has a favorable ratio. You only need to win 33% of trades to be profitable.
ℹ️ Note: Your stop loss price would result in a profit, not a loss. For LONG positions, stop loss should be BELOW entry price.
• Profit when price goes UP (Take Profit > Entry)
• Loss when price goes DOWN (Stop Loss < Entry)
• Risk = Entry - Stop Loss
• Reward = Take Profit - Entry
• Profit when price goes DOWN (Take Profit < Entry)
• Loss when price goes UP (Stop Loss > Entry)
• Risk = Stop Loss - Entry
• Reward = Entry - Take Profit
R:R = |Potential Profit| ÷ |Potential Loss|
Minimum Win Rate for Profitability
33.3%
With a 2.00:1 ratio, you need to win at least 33.3% of trades to be profitable.
Win Rate Formula:
Win Rate Needed = 1 ÷ (1 + R:R) × 100
Excellent
3:1 or better
Min. win rate: 25%
Good
2:1 to 3:1
Min. win rate: 33%
Poor
Below 1:1
Min. win rate: >50%
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When you go LONG, you're buying an asset expecting its price to increase. This is the traditional "buy low, sell high" approach. Your profit comes from the price difference between your entry and take profit levels.
• Entry Price: Your purchase price
• Take Profit: Must be ABOVE entry (price needs to rise)
• Stop Loss: Should be BELOW entry (protects if price falls)
• Profit = Take Profit - Entry Price
• Loss = Entry Price - Stop Loss
When you go SHORT, you're selling an asset you don't own, expecting its price to decrease. You'll later buy it back at a lower price. This is "sell high, buy low" in reverse order.
• Entry Price: Your selling price
• Take Profit: Must be BELOW entry (price needs to fall)
• Stop Loss: Should be ABOVE entry (protects if price rises)
• Profit = Entry Price - Take Profit
• Loss = Stop Loss - Entry Price
For LONG: TP above entry, SL below entry
For SHORT: TP below entry, SL above entry
Never mix these directions.
Always aim for at least 2:1 risk/reward ratio. This applies equally to both long and short positions.
Use this calculator to verify your TP and SL make sense for your chosen position direction.
Combine this calculator with our Position Sizing and Trade Planner tools for a complete professional trading system.
💡 Pro Tip: Never enter a trade without knowing your exact risk/reward ratio first.
Target: 1:1.5 to 1:2, Win rate: 60-70%+, Trades: Many per day
Target: 1:2 to 1:3, Win rate: 50-60%, Trades: 1-5 per day
Target: 1:3 to 1:5, Win rate: 40-50%, Trades: Few per week
Get answers to common questions about using our professional trading tools.
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