Free prop firm tool
Risk/reward calculator for prop traders
Enter your entry, stop and target to get the reward-to-risk ratio, the win rate you need to break even, and your dollar risk and position size.
Estimates only. Firms calculate limits in slightly different ways (server time, equity vs balance, commissions). Always confirm against your firm's dashboard and rules page.
How to use the risk/reward ratio calculator
Choose long or short, then enter your entry, stop loss and take profit prices. The calculator checks that the stop and target are on the correct sides of the entry.
Add your balance, risk per trade and the dollar value of a 1.00 price move for one unit (for example 100,000 for a standard forex lot, 50 for ES or 20 for NQ) to get dollar figures and position size.
The formulas
- Risk = |entry − stop|, reward = |target − entry|
- Reward to risk (R:R) = reward ÷ risk
- Break-even win rate = 1 ÷ (1 + R:R)
- Position size = $ risk ÷ (risk × value of a 1.00 move per unit)
Entry 1.1000, stop 1.0980, target 1.1060. Risk is 0.0020 and reward 0.0060, so R:R is 1:3 and you break even winning 25% of trades.
Risking 1% of $100,000 is $1,000. One standard lot gains $100,000 per 1.00 move, so size is $1,000 ÷ (0.0020 × 100,000) = 5 lots, with $3,000 potential reward.
Common mistakes
- Setting far-away targets just to show a high R:R; the break-even win rate only helps if the target is realistic.
- Widening the stop after entry, which silently changes your risk and ratio.
- Ignoring spread and commission, which matter most on tight stops.
- Risking a large share of your daily loss limit on one trade, however good the ratio looks.
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