Enter your entry, stop-loss and up to three targets with how much you plan to book at each. This risk-reward ratio calculator works out your R-multiple and, if you add your win rate, whether the setup has a real edge.
Risk-Reward Ratio Calculator
No capital or quantity needed. Works per share, for any position size.
Targets (% of position booked at each; leave a row at 0% to ignore it)
R-multiple = reward per share ÷ risk per share. Percentages across targets are weighted automatically even if they do not add to 100%.
Your setup in detail
| Item | Value |
|---|
Educational estimate. Does not include brokerage, charges or slippage, and does not predict whether a target will be hit.
A setup with a 1 : 3 risk-reward ratio sounds safe, but it only makes money if you win often enough. At 1 : 3 you need to be right just one time in four. At 1 : 1 you need to be right half the time. A risk-reward ratio calculator turns that relationship into a number before you take the trade.
How do you use this risk-reward ratio calculator in 3 steps?
- Choose buy or sell, then enter your entry price and stop-loss price.
- Enter up to three target prices, each with the percentage of your position you plan to book there.
- Add your estimated win rate if you want expectancy, then read the ratio, the breakeven win rate and the detail table.
This risk-reward ratio calculator works on a per-share basis, with no capital or quantity needed, so it applies whether you trade one share or a thousand. Use Copy result to save a summary.
How does the risk-reward ratio calculator handle several targets?
Many traders book profit in parts rather than all at once. The calculator weighs each target by the percentage you assign it, so a target you barely use counts for less.
R-multiple = Reward per share ÷ Risk per share
Weighted average R = Sum of (R at each target × its weight)
If your percentages do not add up to 100%, the calculator normalises them automatically, so 50 and 30 still work correctly relative to each other.
What does a worked example look like?
Buy at ₹500 with a stop-loss at ₹490, booking 50% at ₹530, 30% at ₹550 and 20% at ₹580, a split exit Stock Charcha sees traders use often. These figures are illustrative.
| Target | Weight | Reward per share | Ratio |
|---|---|---|---|
| ₹530 | 50% | ₹30.00 | 1 : 3.00 |
| ₹550 | 30% | ₹50.00 | 1 : 5.00 |
| ₹580 | 20% | ₹80.00 | 1 : 8.00 |
The weighted average works out to 1 : 4.60, even though no single target is exactly there. The breakeven win rate for that blended ratio is about 17.9%, well below what a single 1 : 3 target would need.
How does the win rate you need change with the ratio?
A bigger ratio needs a smaller win rate to break even, before charges. Here is a single target at different R-multiples from the same ₹10 risk.
| Target | R-multiple | Win rate needed to break even |
|---|---|---|
| ₹510 | 1 : 1.00 | 50.0% |
| ₹520 | 1 : 2.00 | 33.3% |
| ₹530 | 1 : 3.00 | 25.0% |
| ₹550 | 1 : 5.00 | 16.7% |
At 1 : 1 you need to win half your trades just to stay flat. At 1 : 5 you can be wrong five times out of six and still break even. A wider ratio buys room for a lower win rate.
What is expectancy, and why does it matter more than the ratio alone?
A good ratio means nothing if your actual win rate falls short of what it needs. Expectancy combines both into one number, in units of R, your risk per trade.
Expectancy (R) = (Win rate × Average R) − (Loss rate × 1)
At a 1 : 3 ratio and a 45% win rate, expectancy is about 0.80R positive, so each trade is worth 0.80 times your risk on average. At the same ratio with a 20% win rate, expectancy turns to -0.20R, a losing edge even though the ratio looks attractive. Stock Charcha’s risk-reward ratio calculator makes that crossover visible.
| Win rate (at 1 : 3) | Expectancy | Edge |
|---|---|---|
| 20% | -0.20R | Negative |
| 30% | 0.20R | Positive |
| 40% | 0.60R | Positive |
| 50% | 1.00R | Positive |
The crossover sits exactly at the 25% breakeven win rate for a 1 : 3 setup. This risk-reward ratio calculator finds that line for your own numbers, not just this example.
What does this risk-reward ratio calculator leave out?
It does not include brokerage, STT or other charges, so the real breakeven win rate is a little higher than shown. Our brokerage calculator adds those up. It also assumes your stop-loss and targets are filled exactly where planned, which a gap can break.
Your win rate is an estimate you supply, usually from your own trading history, and past results do not guarantee future ones. This is an educational tool, not a trading system. Investments in the securities market are subject to market risks.
Where should you go after using the risk-reward ratio calculator?
To size your position from the same entry and stop-loss, use the position size calculator. For margin on an intraday trade, see the intraday margin calculator, and for net profit after charges, the stock profit and loss calculator.
The Trading section of the Charcha Knowledge Hub has more. Run the risk-reward ratio calculator on your next setup before deciding whether it is worth taking.
Related calculators
- Position size calculator
- Intraday margin calculator
- Stock profit and loss calculator
- Brokerage calculator
Last updated: 3 October 2026. This page uses no rates, slabs or charges, so the maths stays the same until the method changes.
Founder of Stock Charcha. Stock market enthusiast, actively investing since November 2022. About the author
Educational content only. This page is not personalised financial advice, and nothing here is a recommendation to buy or sell any stock. Please do your own research or speak to a SEBI-registered adviser, and read our disclaimer.
Frequently asked questions
What is a good risk-reward ratio?
There is no single good number on the Stock Charcha risk-reward ratio calculator, because it depends on your win rate. A 1 : 2 ratio needs a 33% win rate to break even, while 1 : 1 needs 50%.
Is a higher risk-reward ratio always better?
Not if it comes from an unrealistic target. A distant target may look like 1 : 8 on paper but rarely gets hit, which lowers your real win rate. A ratio only helps if the target is one you can realistically reach.
What does a negative expectancy mean?
It means that, on average, each trade loses money even though some trades win. A setup with a 1 : 3 ratio but only a 20% win rate has negative expectancy, so trading it repeatedly tends to lose money over time.
Where do I get my win rate to enter in the calculator?
From your own trading history, ideally 30 or more similar trades, since a handful of trades is too few to judge. If you are new, leave the win rate blank and focus on the ratio and the breakeven line instead.
Can I use this for options or futures, not just equity?
The ratio and expectancy maths work for any instrument priced in rupees per unit, including futures. For options, use the premium as the price. It does not account for time decay or volatility, which affect options differently from stocks.