How to use this calculator
- Choose long or short and enter prices for one instrument using the same quote units.
- For long positions, the stop must be below entry and the target above it. Reverse these relationships for shorts.
- Read the ratio as reward per one unit of risk. Use the expectancy calculator to consider average outcomes and costs.
Formula and worked example
Reward-to-risk = target distance ÷ stop distance. Theoretical break-even win rate (%) = stop distance ÷ (stop distance + target distance) × 100.
For a long entry at 100, stop at 95, and target at 110, the price risk is 5 and potential reward is 10. Reward-to-risk is 2:1 (equivalently risk-to-reward is 1:2). Under the fixed full-win/full-loss model, the before-cost break-even win rate is 5 ÷ 15 = 33.33%.
What the result does—and does not—tell you
A planned target is not a realized average win. Partial exits, trailing stops, missed fills, and early decisions change outcomes. A large ratio does not establish that a target is likely to be reached. This linear price-distance model does not value options or other non-linear payoffs, and it does not convert a price movement into account-currency profit.
Frequently asked questions
Is 2:1 the same as 1:2?
Only if the order is stated. This tool shows reward-to-risk: 2 units of reward for 1 unit of risk. The same setup has a risk-to-reward ratio of 1:2.
Does the break-even win rate include fees?
No. It assumes every winning trade achieves the entered target and every losing trade exits at the entered stop, with no costs. Use net expectancy for a cost-adjusted two-outcome estimate.
Can I calculate short trades?
Yes. Select short, then enter a target below entry and a stop above entry. Incorrect price ordering produces a validation message.
Methodology and limitations
WTE Toolbox · Calculation model v1 · Updated September 6, 2026. These are deterministic calculations from manually supplied inputs. Examples are hypothetical, not recommended trades or risk limits. No market feed, account connection, or broker validation is used. Display values are rounded; calculations use unrounded intermediate values.
Educational use only, not personalized financial advice. Trading can result in substantial losses. A calculated stop loss is not a guaranteed execution price or maximum loss.