Risk Reward & Win Rate Calculator

Traders are recommended to use our risk-reward ratio and win rate calculator. Our tool helps traders assess potential gains before execution. Using the calculator tools helps traders identify profitability opportunities and reduce risks.

When you input the values into our calculator, it calculates the risk-reward ratios and breakeven win rate (%). This calculator strengthens your trading consistency, accuracy, and overall performance. If you are already involved in trading, then you must learn how to use our risk-reward ratio calculator. Let us help you use our calculator.

How to Use Our Risk/Reward & Win Rate Calculator

Our risk reward & win rate calculator will simplify your trading Process. It helps you to calculate the risk-reward ratios. Here are the right ways you should follow to use our tool

Enter the entry price.

First, fill in the entry price on your risk-reward win rate calculator. You must enter the price you plan to enter in the trading market. This is the price at which you can easily buy or sell trade assets. It is called the entry price.

Input the stop-loss price.

Next, you have to enter the stop loss price, where you can exit the position from the trade. This exit position prevents losses if the market fluctuates more. The point where you exit a trade is called stop loss.

Specify the take profit price.

Now, you should determine and input the price at which you plan to close your position to gain profits this price is called “take profit price.”

Calculate

Once you fill in the inputs, you now click on the “calculate” button. After this, our calculator will process the inputted figures to give you precise results.

Let us help you understand the results given by our risk-reward win rate calculator by taking this example.

Let’s take an example, you trade on a stock, named ABC Corp. So,

Entry price: You decide to buy ABC Corp at USD 100

Stop loss price: Based on your analysis, you set a $95 stop loss, which means you are ready to take a $5 risk per  trade

Take profit price: Your target price to sell trade assets is $115. It aims for a $15 profit on every trade.

So, to calculate the risk-reward ratio  by our calculator

Risk: $100 (entry price) – $95 (stop loss) = $5

Reward: $115 (take profit) – $100 (entry price) = $15

Risk-Reward Ratio: $15 (reward) / $5 (risk) = 3:1

It means you are agreeing to take a $1 risk to earn $3 on the favorable ratio.

Introduction  of Risk Reward Win rate calculator

Our Risk Reward Win rate Calculator is a calculation tool mostly used by traders, because of its convenience, accessibility, accurate results, and other benefits. Our tool helps you to assess the potential gains of trade related to risk consists in it. It also helps traders to determine the position of stop loss and take profit levels based on their trading methods.

You need to enter the entry price, stop loss, and take profit levels on our calculator. Once you enter these inputs, our tool calculates the risk-to-reward ratio, that is ratio of potential gain to potential loss for the trade. This ratio is important for traders, to determine whether the trade is worth taking, based on profit targets and risk tolerance. Here are the aspects that show the importance of our Risk Reward Win Rate calculator tool

• Our tool calculates the risks and rewards for your every trade and helps you to make informed decisions.
• You can make your trade more worthy by staying updated with risk, reward ratios, and win rates from our tool.
• This calculator will help you to better control risk in your portfolio and avoid big losses.
• Our risk/reward ratio calculator enables traders to easily set stop-loss levels and take profit levels for success in a volatile market.
• Overall, using our tool improves the trader’s approach and encourages them to maintain discipline and consistency in their trade.

Key Inputs

To use the Risk Reward Win rate Calculator properly, you have to understand the key inputs, that you should enter on it. It helps you to determine the profit levels of your trade and make informed decisions.

Risk per Trade

Risk per trade means the amount of capital that you can invest in every single trade. This figure will set your foundation to calculate the potential rewards and risks by using our calculator. For example, if you can take a $100 risk on every trade, it means you are ready to lose $100 if the market fluctuates and trade does not executive, according to your plan.

So, it is suggested that traders set consistent risk per trade to maintain discipline. Our Risk Reward Win Rate Calculator will ensure that you are not exposed to losses and don’t harm your overall trading capital on a single trade.

Reward Ratio

The reward ratio is called the risk/reward ratio. It marks the ratio of reward to risk taken on every trade. An average target of 2:1 ratio marks that you aim to earn twice as much as you take risks.

For example, if you are ready to take a $100 risk, then you aim to make a $200 profit on every trade. This reward ratio is important because it helps you to determine the return level you are looking for, related to risk. If you see a high reward ratio on our calculator, it means you can afford a lower win rate.

Win Rate

Win rate is the trade percentage that is successful out of total executed trades. For example, a 50% win rate means that half of the trade is profitable to you. This metric is essential to assess the trading effectiveness. A higher win rate shows a lower reward ratio, whereas a lower win rate shows a high reward ratio, and increases profitability. So, you have to understand and estimate the win rate properly to set your trading goals, as per currency strategy.

Calculation Process

The formula to calculate the reward ratio is

• Formula: Expected Return=(Win Rate×Reward)−((1−Win Rate)×Risk)

Let us take the example of expected return for a trader with a 60% win rate and 2:1 risk-reward ratio

• Risk per Trade: $100
• Reward Ratio: 2:1 (Reward = $200)
• Win Rate: 60% (0.6)

By using this formula, we get the expected return as

Expected Return=(0.6×200)−((1−0.6)×100)\Expected Return =120−40=80

The expected return calculated on every trade is $80. It shows the potentially profitable trading strategy for traders.

Importance of the Risk/Reward Ratio

The risk/reward ratio is the famous metric used by traders to compare the return on investment to its risk. A favorable risk-reward ratio is an indication of investment where the reward is more than the risk involved in it.

This ratio is important for traders to make strategic investments and worthwhile their investments worthwhile. It helps traders to determine opportunities that align with their investment goals and risk tolerance. This ratio holds fundamental concepts in trading and helps traders to manage loss. It not only manages losses but also enhances gains. The risk and reward ratio compares the risk amount taken on trade to the potential reward. It gives you a clear framework to determine the viability of trading strategies.

Risk/Reward Ratio

A higher risk/ reward ratio means that traders aim to earn more per winning trade than lose money on losing trades. For example, a 3:1 risk-reward ratio indicates that traders will make 3 dollars on every $1 risk involved.

This method will help traders to make trade profitable, even if the win rate is not too high. It helps the trader to target their trade with a favorable risk-reward ratio. It helps them to win their traders, cover most of their losses, and gain profits.

Impact of Win Rate

The win rate is called the percentage of successful trades. In forex trading, the win rate plays an important role in the effectiveness of the risk-reward ratio calculated by our tool. Even with a low win rate, you can get a favorable risk-reward ratio to make profitability. For example, 2:1 risk-reward ratio, a trader can make profits with a low win rate is 34%. This is because the gains from winning a trade will be more than the losses from losing a trade.

On the other hand, high win rates are combined with a poor risk-reward ratio. It does not guarantee profitability. For example, 90% of the win rate appears impressive, but if the risk-reward ratio is 1:5. In this case, the losses from 10% of losing trades can be out of gains from 90% of win trades.

Using the Results

After getting the results from our Risk Reward Win Rate Calculator, you can use the risk-reward and win rate results.

Set Realistic Goals

Ensure that your stop loss levels and take profit levels are favorable and align with market conditions.

Adjusts for volatility

Market volatility affects the risk-reward ratio. It is suggested that traders adjust the stop loss and take profit levels after seeing results on our calculator.

Monitors the trade

You should monitor the trade continuously to make the required adjustments and ensure a favorable risk-reward ratio.

Practical Use

Here are the practical uses of our Risk Reward Win Rate Calculator

Profitability assessment

Risk Management is the best strategy for successful trading. Without a strong risk management strategy, even the researched trade, are cause losses. Our Risk Reward Win rate Calculator provides you best strategy, allows you to expand your profits, and reduces the risk of trades.

Consider the case where the trader is entering a volatile market. This risk-reward ratio will give you clarity on whether the reward justifies the risk. For example, the 1:3 ratio, where the reward is 3 times the risk, can show favorable trade. On the other hand, the ratio of 1:1 suggests that risk does not compensate for potential reward. It urges the traders to redefine, reconsider, or refine their approach.

Decision Making 

Another practical use of our Risk Reward Win Rate Calculator is that it helps you to make informed decisions. Our tool empowers you to evaluate the profitability of different trades. By calculating potential losses against profit, the targets can prioritize traders with high ratios and optimize the strategy.

This decision-making process is important in volatile markets when the market conditions will change. With our tool, traders can assess their positions again and make necessary changes. It increases the profits and reduces losses.