Reward-to-Risk Ratio Calculator – Measure Profit Potential vs. Risk Before Trading

Understanding the Power of Trading Tools

In financial markets, success doesn’t come from luck — it comes from using the right tools and strategies that help traders make rational and well-calculated decisions. Each tool provides a unique way to analyze risk, reward, liquidity, and timing, allowing traders to enter positions confidently and manage them wisely.

At ProChartInsight, we aim to make these tools simple, visual, and accessible for everyone. Whether you are a beginner learning technical analysis or an experienced trader optimizing your strategy, our interactive calculators turn complex formulas into practical insights.

Previously Released Trading Tools

• Pivot Points Calculator – Identify key support and resistance levels for intraday and swing trading.
• Fibonacci Retracement Calculator – Discover natural price pullback zones and reversal points.
• Risk Management Calculator – Control your losses and calculate proper position size per trade.
• Position Sizing Tool – Determine the ideal trade size based on your account balance and stop-loss distance.

Today, we introduce another essential component of smart trading — the Reward-to-Risk Ratio Calculator.

What Is the Reward-to-Risk Ratio?

The Reward-to-Risk Ratio measures how much profit a trader can expect to earn compared to the potential loss on a trade. It’s a simple yet powerful concept that tells you whether a trade is worth taking or should be avoided.

In short:

• Higher ratio → better potential reward compared to risk ✅
• Lower ratio → poor setup that might not justify the risk ❌

By calculating this ratio before entering a trade, you can focus on setups that offer attractive returns and avoid those that expose you to unnecessary losses.

How to Use the Calculator

Follow these quick steps:

1. Enter Entry Price: The price where you plan to open the trade.
2. Enter Stop Loss: The price where you will close the trade if it moves against you.
3. Enter Take Profit: The price where you expect to exit with profit.
4. Click “Calculate” to view your Reward-to-Risk ratio.

The tool will instantly show whether your setup is favorable or risky using color indicators:

• Red → Poor (Ratio below 1:1)
• Orange → Moderate (1:1 to 2:1)
• Green → Excellent (above 2:1)

Example Calculation

Let’s take an example of a long (buy) trade:

Entry Price	100
Stop Loss	95
Take Profit	115

Calculation:
Reward = 115 − 100 = 15
Risk = 100 − 95 = 5
Ratio = 15 ÷ 5 = 3:1

This means for every $1 risked, you stand to gain $3. Such trades are usually considered high-quality opportunities under proper risk management.

Reward-to-Risk Ratio Calculator

Entry Price: Stop Loss: Take Profit:

Final Thoughts

A disciplined trader never focuses only on profits — they focus on the balance between reward and risk. By using this calculator, you can instantly see whether a trade deserves your capital or should be avoided.

Combine this tool with the Position Sizing and Risk Management Calculators available on ProChartInsight for complete trade planning and smarter capital control.

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Disclaimer: This calculator is provided for educational and informational purposes only. It does not constitute financial advice or investment recommendations. Always conduct your own analysis before trading.