Risk Reward Calculator
Free risk reward calculator for stocks. Enter entry, stop, and target to see risk/reward ratio, dollar risk, and potential profit before you take the trade.
Enter entry, stop-loss, and target to get your risk/reward ratio, potential profit vs loss, and whether the setup clears a 2:1 (or better) bar. Pair it with position sizing so every idea has defined upside and downside.
What is a risk reward calculator?
A risk reward calculator answers: if I'm wrong, how much do I lose — and if I'm right, how much do I make? You plug in entry, stop-loss, and target. The tool returns a risk/reward ratio (often written 1:2), plus per-share and dollar figures so you can reject weak setups before they become real losses.
Risk reward formula
Ratio = (Target − Entry) ÷ (Entry − Stop) for a long trade (flip the distances for a short).
Example: buy at $100, stop at $95, target at $110. Risk = $5, reward = $10, ratio = 1 : 2. You need to be right less often than on a 1:1 setup for the math to work — but only if you actually take the stop and the target with discipline.
How to use this free risk/reward calculator
- Pick long or short.
- Enter entry, stop-loss, and take-profit prices that match your chart levels.
- Add share count if you want dollar risk and reward (not just the ratio).
- Check the grade — aim for 2:1+ unless you have a proven high win-rate system.
- Size the trade with the position size calculator so the dollar risk matches your account risk %.
Risk/reward vs win rate
A 1:2 system can be profitable at a 40% win rate. A 1:1 system needs closer to 50%+ after costs. A 1:0.5 system needs to be right most of the time — which is why beginners who chase tight targets and wide stops bleed out. Your journal should track both win rate and average R-multiple, not just green/red days.
Common risk reward mistakes
- Moving the stop after entry: That silently destroys the ratio you calculated.
- Fantasy targets: A 1:5 ratio means nothing if price never reaches the target.
- Ignoring fees and slippage: On small scalps, costs can turn a 1:1.2 into a loser.
- Sizing after the fact: Decide risk % and ratio first, then shares — not the reverse.
Practice defining stops and targets in the stock market simulator before risking real capital. Read more in our risk/reward ratio guide.
Frequently asked questions
Related free trading tools
Explore more free calculators and simulators on Swift Penguin: stock market simulator, stock screener, market heatmap, economic calendar, earnings calendar, compare stocks, stock watchlist, dividend calendar, live stock lookup, position size calculator, compound growth projector, dividend & DRIP calculator, options profit calculator, portfolio tracker, dollar cost averaging calculator, average cost calculator, stock profit calculator, investment return calculator, capital gains tax calculator, retirement & FIRE calculator, inflation calculator, stop-loss calculator, Trading 212 portfolio charts, crypto prices & charts, crypto markets, crypto profit calculator, crypto DCA calculator, crypto position size, and crypto converter. Browse all free stock trading tools.
Educational calculator only — not financial advice. Past patterns do not guarantee future results. Capital at risk.
