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Calculator # 10
Risk Reward Ratio

"What is your R-Multiple?"

Description
Risk Reward Ratio, also know as the R- Multiple, assesses the profitability of a trade to its' overall risk. The resulting Ratio needs to be higher then 1. A Ratio of 1 means the trade is break-even. Anything lower then 1 is a losing trade. 

Example
I am Long 1,000 ABC shares at $5.00 per share. My Stop Loss is $4 and my Target is $7. This results in a Risk Reward Ratio of 2.00 meaning that for every $1 dollar at risk I will be rewarded with $2.00. 

The Risk Reward Ratio app for stock, options and futures traders

Risk Reward Ratio Calculator App