Risk to Reward Ratio Calculator
The Risk to Reward Calculator helps traders evaluate the profitability and risk-adjusted viability of any trade setup by comparing the prospective downside risk against the upside profit target.
Risk-Reward Analysis
How Does the Risk Reward Calculator Work?
The Risk to Reward Calculator helps traders evaluate the profitability and risk-adjusted viability of any trade setup by comparing the prospective downside risk against the upside profit target.
By inputting your customized parameters into the calculator sliders or numeric input fields above, the tool immediately processes the mathematical formulas in real time to generate interactive visual graphs, principal vs interest splits, and detailed summary tables.
Risk to Reward Formula
Variables Explained:
| Risk per Unit | Entry Price - Stop Loss Price (for Long trades) or Stop Loss - Entry (for Short trades) |
| Reward per Unit | Target Price - Entry Price (for Long trades) or Entry - Target (for Short trades) |
| Breakeven Win Rate | 1 / (1 + Reward:Risk Ratio) × 100 |
1:3 Risk to Reward Ratio Example
Risking ₹20 to make ₹60 produces a 1:3 Risk-to-Reward ratio. With a 1:3 ratio, a trader only needs a 25% win rate to stay profitable over time.
Example Input Parameters:
- Entry Price ₹1,000
- Stop Loss Price ₹980 (Risk = ₹20 per share)
- Target Price ₹1,060 (Reward = ₹60 per share)
Calculated Output Summary:
- Risk : Reward Ratio 1 : 3.0
- Breakeven Win Rate 25.0%
- Trade Status Favorable High-Probability Setup
Frequently Asked Questions (FAQs)
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Financial Disclaimer
Calculator results are mathematical estimates for informational and educational purposes only. Actual returns, EMI values, tax deductions, and maturity proceeds may vary based on lender policies, market conditions, and regulatory revisions.
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