Risk/Reward analysis is built into the Position Size Calculator's Complete Trade Analyzer mode. Switch to "Complete Trade Analyzer" to access R:R ratio, potential profit, breakeven win rate, and cost analysis. This guide walks you through the full workflow.

What You'll Need

Your account balance and leverage
Planned risk (as percentage or fixed amount)
Entry price, stop loss, and take profit levels
Optional: Spread, commission, and swap costs

Step-by-Step Instructions

1Switch to Complete Trade Analyzer

On the Position Sizer tab, click "Complete Trade Analyzer" at the top. Then fill in:

Account Balance: Your total trading capital
Leverage: Your broker's leverage
Risk: Toggle between Percentage or Amount mode

Example:
Account Balance: 10000
Leverage: 100
Risk: Percentage mode → 1

2Enter Trade Details (Entry, SL, TP)

Enter your Entry Price and Stop Loss (in Price or Pips mode). Then enter your Take Profit target (in Price or Pips mode).

Example: EUR/USD long at 1.0850, stop at 1.0820 (30 pips), TP at 1.0910 (60 pips)
Entry: 1.0850, SL Price: 1.0820, TP Price: 1.0910

3Click Calculate & Review Results

The Reward Metrics section shows:

Risk/Reward Ratio: e.g., "1 : 2" (risk $1 to make $2)
Potential Profit: Dollar amount of reward
TP Distance: Take profit in pips
Breakeven Win Rate: Minimum win rate needed

The Cost Analysis section also shows spread cost, commission, swap per night, and Net Profit After Costs.

Understanding Risk/Reward Ratios

Good Ratios (Take the Trade)

1:2 - Risk $100 to make $200 (minimum recommended)
1:3 - Risk $100 to make $300 (excellent)
1:4+ - Risk $100 to make $400+ (exceptional)

Poor Ratios (Skip the Trade)

1:1 - Risk $100 to make $100 (break-even at best)
2:1 - Risk $100 to make $50 (terrible, avoid!)

💡 Rule of Thumb: Never take a trade with less than 1:1.5 risk/reward. Ideally, aim for 1:2 or better.

Real Trading Example

Setup: GBP/USD Long

Plan:
• Entry: 1.2650
• Stop Loss: 1.2620 (30 pips below)
• Take Profit: 1.2740 (90 pips above)
• Account: $5,000
• Risk: 2% ($100)

Calculator Input (Complete Trade Analyzer mode):
Account Balance: 5000
Leverage: 100
Risk: Percentage → 2
Direction: Buy, Entry: 1.2650
Stop Loss (Price): 1.2620
Take Profit (Price): 1.2740

Result:
Risk/Reward: 1:3 ✅
Risk: $100
Reward: $300
Verdict: Excellent trade! Take it.

Common Mistakes

❌ Mistake #1: Forcing a Trade with Poor R:R

Natural resistance is only 20 pips away but support is 50 pips below. That's a 2.5:1 ratio (risk $250 to make $100). Skip it!

❌ Mistake #2: Moving Targets to Get Better Ratio

Don't set unrealistic targets just to make the ratio look good. Use actual support/resistance levels.

❌ Mistake #3: Ignoring the Ratio After Entry

If your original plan was 1:2 (30 pip stop, 60 pip target), don't take profit early at 30 pips. You just turned 1:2 into 1:1.

Pro Tips

💡 Tip #1: With a 1:2 R:R, you only need a 33% win rate to profit. With 1:3, you only need 25%!

💡 Tip #2: Calculate R:R BEFORE entering the trade, not after. It's a decision-making tool, not a justification tool.

💡 Tip #3: If you can't find a 1:2 setup, don't trade. Patience is profitable.

FAQ

Q: What if my R:R is exactly 1:1?

A: Skip it. After spreads and commissions, you'll barely break even. Hold out for 1:1.5 minimum.

Q: Can I use this for multiple take profit levels?

A: Use your final TP level. Or calculate each level separately if you're scaling out.

Q: Does this work for all markets?

A: Yes! R:R ratios apply to forex, stocks, crypto, commodities—any traded instrument.

Open Complete Trade Analyzer →

Related: Complete R:R Guide | All Calculators