Reward-Risk Ratio
The ratio comparing potential profit to potential risk for a trade.
Formula
R:R = (Target - Entry) / (Entry - Stop)
More Details
What is Reward-Risk Ratio?
Reward-Risk Ratio (R:R) compares potential profit to potential risk. It's expressed as a ratio like 2:1 or 3:1, meaning you gain 2 or 3 units for every 1 unit risked.
Example
- Entry: $50.00
- Stop: $48.00 (risk $2)
- Target: $56.00 (reward $6)
- Reward-Risk = 3:1
Required R:R by Win Rate
| Win Rate | Min R:R for Breakeven |
|---|---|
| 70% | 0.43:1 |
| 60% | 0.67:1 |
| 50% | 1:1 |
| 40% | 1.5:1 |
| 30% | 2.33:1 |
Planned vs Actual R:R
Planned: What you intended
Actual: What happened
These often differ significantly!
TradesViz R:R Analysis
- Planned vs actual comparison
- Performance by planned R:R
- Optimal R:R discovery per setup
- Win rate at different R:R levels
Where to find it in TradesViz
Summary > Overall Statistics > Scores/Metrics shows average Risk/Reward ratio. Performance Metrics > Reward/Risk & Expectancy tab displays cumulative R:R trends. Set stop loss and profit targets on trades to enable planned vs actual comparison.
Example
Entry at 50, Stop at 48, Target at 56 gives 3:1 Reward-Risk