Risk/reward calculator with break-even win rate

Risk/reward is how far your target is, divided by how far your stop is. At 1:2 you break even by winning one trade in three, 33.3%, before fees. Enter your entry, stop, target and win rate above: the calculator adds the fees, works out what an average trade earns in R and shows the losing streak you should expect in a series of trades.

How risk/reward and break-even are calculated

R is the loss at your stop; a trade's result in R is its money divided by that loss. The calculator assumes every trade ends either at the stop or at the target.

R:R                  = |Target − Entry| ÷ |Entry − Stop|
Break-even win rate  = 1 ÷ (1 + R:R)

With a fee f on each side, in R:
  a loss costs       1 + f × (Entry + Stop) ÷ |Entry − Stop|
  a win pays         R:R − f × (Entry + Target) ÷ |Entry − Stop|
  break-even         = loss ÷ (win + loss)
Expectancy           = Win rate × win − (1 − Win rate) × loss

Expectancy is what an average trade earns in R. Multiply it by your risk per trade to get it in percent of the account.

Break-even win rate for common ratios

Before fees, the win rate you need falls fast as the target moves out:

A far target is not free: it is reached less often. Your win rate and your R:R come from the same trades, so read both from your own journal.

Worked example

The calculator opens with entry 62,500, stop 61,250 and target 65,000: 1,250 separates entry and stop, 2,500 entry and target, so R:R is 1:2. The win rate is 40%, the fee 0.05% on each side, the risk 1% a trade.

1. Break-even before fees: 1 ÷ (1 + 2) = 33.3%.
2. Fees in R: a loss costs 1 + 0.0005 × 123,750 ÷ 1,250 = 1.0495R; a win pays 2 − 0.0005 × 127,500 ÷ 1,250 = 1.949R.
3. Break-even with fees: 1.0495 ÷ (1.949 + 1.0495) = 35.0%.
4. Expectancy: 0.4 × 2 − 0.6 × 1 = +0.20R before fees; 0.4 × 1.949 − 0.6 × 1.0495 = +0.15R after them. At 1% risk that is +0.15% of the account a trade, +15.0R over 100 trades.

Fees take a quarter of this edge: from +0.20R to +0.15R. The closer the stop, the larger that share, because the same fee is divided by a smaller distance.

Losing streaks: what the calculator counts

Even a setup that pays loses several times in a row. The calculator works out, exactly, the chance of at least one run of k losses in a row within your series, assuming the trades are independent and the win rate stays the same. It then reports two streaks: the longest with a chance of one in two or more, and the longest with a chance of one in ten or more.

At a 40% win rate over 100 trades a run of 7 losses comes with a 68.9% chance, a run of 8 with 49.0%, a run of 11 with 12.6%. So the calculator shows 7 and 11. At 1% risk of the current balance, 7 losses in a row take 6.8% of the account and 11 take 10.5%: 1 − 0.99^k.

Real trades are not coin flips: losses cluster in bad market phases and after tilt. Treat these streaks as the floor of what to expect, not the ceiling. How far a streak takes the account at 0.5% to 10% risk is in the table of the risk per trade guide.

When the planned ratio misleads

• Exits between stop and target. A trade closed by hand, or moved to break-even, is neither a full win nor a full loss. Then the R of each trade in your journal is the honest input, not the planned ratio.
• Slippage. A stop can fill beyond its price, so a real loss can exceed 1R.
• Sample size. A win rate read from 20 trades can miss the true one by a lot. The more trades, the closer.
• Funding and swap. Holding costs are left out.

To turn the stop into a size, use the position size calculator for crypto futures or the lot size calculator for MetaTrader 5. How far trades go against you before they work is the subject of the MAE and MFE guide. Win rate, R and expectancy from your own trades come out of the trading journal template, free to download.

Frequently asked questions

What is a good risk/reward ratio?

There is no single number: it only means something next to your win rate. At 1:1 you need more than 50% winners, at 1:3 more than 25%, before fees.

What win rate do I need at 1:2?

33.3% before fees. With a 0.05% fee on each side and the example's stop of 2%, 35.0%.

How long a losing streak should I expect?

At a 50% win rate over 100 trades, 6 losses in a row have a 54.6% chance and 8 a 17.0% chance. At 40%, 8 in a row come with 49.0%.

Does the ratio include fees?

The ratio does not; the break-even and expectancy lines with fees do. Enter 0 to leave fees out.

Sources

• Van Tharp Institute, «A Short Lesson on R and R-Multiples» (PDF): R is the initial risk your stop defines, each result is counted in R-multiples, and expectancy is what you win on average for every dollar you risk.
• Binance futures fee schedule: each fill pays notional × rate; a regular account pays 0.05% as taker.
• Bybit fee table: perpetuals at VIP 0 cost takers 0.055%.