This calculator gives the risk/reward ratio of a trade using entry, stop-loss and target prices, and shows the monetary risk implied by the position size.
Risk/Reward Calculator
Size a trade before entering: compare maximum loss, potential reward, ratio and capital used.
SIMULATOR
Your numbers
Recalculates instantly as you move the sliders.
ESTIMATED RESULT3:1
MAXIMUM RISK€550
REWARD€1,650
CAPITAL USED€14,550
Maximum risk€550
Potential reward€1,650
The red bar is what you risk down to the stop; the green bar is the reward up to the target.
Save ratio 3:1. Favorable setup: potential reward is at least twice the risk. Capital used: €14,550.
Enter the entry price, stop price, target price and position size. The tool calculates risk per unit, potential reward per unit, total risk and the ratio between them.
Risk per unit is the distance from entry to stop. Potential reward per unit is the distance from entry to target. The ratio is reward divided by risk, then scaled by position size.
A -2% stop and +4% target produce a 2:1 ratio: one unit of risk for two units of potential reward.
A high ratio alone is not enough. Ratio and probability belong together: a 3:1 setup with very low probability can still be unattractive mathematically.
Common mistakes are focusing only on the ratio, changing the stop after entering, and sizing the position without first defining the acceptable loss.
Assumptions: it uses the prices you enter and does not estimate probability. Stop orders may execute worse in gaps or illiquid markets.
CNMV — Risk warnings · Bank of Spain — Financial Education
Risk/Reward Calculator, with context
What ratio should I look for?
Many traders use 2:1 as a reference, but the relevant level depends on hit rate and strategy.
Does the stop guarantee the maximum loss?
It limits it, but gaps and liquidity can make execution worse.
Is it useful for long-term investing?
It is more common in trading. Long-term risk is usually managed with diversification, horizon and allocation.
How do I size the position?
Start from the amount you accept losing and the distance to the stop.
Illustrative results for educational purposes · Educational information, not financial advice.