Forex Risk Reward Calculator 🧮

Successful trading starts with proper planning. Use our Forex Risk Reward Calculator to evaluate your trade setups before you enter the market. This tool helps you calculate the risk-to-reward ratio in seconds — ensuring that your trades align with your strategy and money management rules.

How to Use the Risk Reward Calculator

1. Enter Entry Price – The price level where you plan to enter the trade.
2. Set Stop Loss – The price level where your trade will be exited if the market moves against you.
3. Set Take Profit – The price target where you plan to close your trade in profit.
4. Click Calculate – The tool will show your Risk:Reward Ratio, pip distance, and potential profit/loss.

💡 Tip: Professional traders usually aim for at least a 1:2 risk-to-reward ratio — meaning they risk $1 to make $2.

Why Risk to Reward Ratio Matters

The Risk to Reward Ratio (RRR) is one of the most important concepts in trading. Even if you don’t win every trade, a good RRR ensures your overall profitability. For example, if your average win is twice your average loss (1:2), you only need to win about 34% of the time to break even.

This calculator allows you to plan smarter trades, avoid emotional decision-making, and quickly filter out low-quality setups.

Example Calculation

Let’s say you plan to buy EUR/USD at 1.1000, set your stop loss at 1.0980 (20 pips risk), and your take profit at 1.1040 (40 pips reward). ➡️ Your risk-to-reward ratio is 1:2. This means if you win this trade, your profit will be twice your potential loss.

Related Forex Tools

• Position Size Calculator
• Pip Value Calculator
• Profit Calculator
• Compounding Calculator

Frequently Asked Questions (FAQ)

What is Risk to Reward Ratio?

It’s a ratio that compares the potential loss (risk) of a trade to its potential gain (reward). For example, 1:3 means you risk $1 to make $3.

What is a good Risk to Reward Ratio?

Many professional traders target at least 1:2 or higher. The higher the ratio, the fewer winning trades you need to stay profitable.

Does this calculator work for all assets?

Yes. It works for forex pairs, gold, crypto, indices, and more — as long as you input correct entry, stop loss, and take profit levels.

External References

• Investopedia – Risk/Reward Ratio
• Myfxbook Risk Reward Calculator