CoinProfitTools
Crypto profit, fee & risk calculators

Risk-Reward Ratio Calculator

Calculate the risk-to-reward ratio of your trade based on entry price, stop-loss, and target price.

What Is the Risk-Reward Ratio?

The risk-reward ratio shows how much profit you expect to make compared to how much you are willing to lose on a trade. For example, if you risk $100 to make $300, your risk-reward ratio is 1:3.

Why Risk-Reward Ratio Is Critical in Trading

You don’t need to win every trade to be profitable. If your average reward is larger than your average risk, you can stay profitable even with a lower win rate.

How to Use the Risk-Reward Ratio Calculator

1. Enter your trade entry price
2. Enter your stop-loss price
3. Enter your take-profit price
4. Select Long or Short
5. Click “Calculate Risk-Reward Ratio”

What Is a Good Risk-Reward Ratio?

Most professional traders aim for:
• Minimum: 1:2
• Preferred: 1:3 or higher

Risk-Reward vs Win Rate

With a 1:2 risk-reward ratio, you only need to win around 40% of your trades to be profitable in the long run.

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Frequently Asked Questions

What is the best risk-reward ratio for crypto trading?

Most traders aim for at least a 1:2 ratio. This means for every $1 you risk, you aim to make $2. A higher ratio like 1:3 provides even better long-term profitability.

Can I trade with a bad risk-reward ratio?

You can, but it is dangerous. A low reward compared to risk means you must win a very high percentage of trades to stay profitable.

Does leverage change the risk-reward ratio?

No. Leverage increases both potential profit and loss equally, but it does not change the ratio itself. It only affects the speed of profit or loss.

Is risk-reward more important than accuracy?

Yes. Even traders with 40–50% win rates can stay profitable if their risk-reward is strong.

Should I always calculate risk-reward before entering a trade?

Yes. Professional traders always define risk, reward, and stop-loss before entering any trade.