How do you calculate the risk-to-reward ratio?
Only enter a trade if the ratio is 1:3 — R:R Risk-to-Reward Ratio Calculator
What is the R:R ratio?
It compares the potential profit with the potential loss on a trade.
Formula:
R:R = (Take Profit - Entry Price) ÷ (Entry Price - Stop Loss)
Ideal ratio = 1:3 or higher
This gives you an edge over the long term.
Real-world example — long trade:
- Entry Price: 10,000 USDT
- Stop Loss: 9,800 USDT → Risk = 10,000 - 9,800 = 200 USDT
- Take Profit: 10,600 USDT → Reward = 10,600 - 10,000 = 600 USDT
Calculating the R:R ratio:
600 ÷ 200 = 3
Result = 1:3
Excellent ratio ✅
This means that for every 1 USDT you risk, you earn 3 USDT if the target is reached.
The reward is 3 times the risk.
Why use a 1:3 ratio?
If you win just 1 out of 3 trades, you’ll still be profitable overall!
- Protect your capital from repeated losses
- Improve your success rate over the long term
- Be more disciplined in managing risk
4 golden rules of risk management:
1. Don’t risk more than 2% of your capital
2. Look for trades with a minimum 1:2 ratio, preferably 1:3
3. Stick to your stop loss and don’t move it emotionally
4. Discipline and consistency matter more than any single winning trade
Reminder: Trading success depends on risk management—not just on choosing winning trades.
$RLC
$GTC
$USDT
#BTC☀ #ETH🔥🔥🔥🔥🔥🔥
#bnb
#BinanceSquareFamily
Only enter a trade if the ratio is 1:3 — R:R Risk-to-Reward Ratio Calculator
What is the R:R ratio?
It compares the potential profit with the potential loss on a trade.
Formula:
R:R = (Take Profit - Entry Price) ÷ (Entry Price - Stop Loss)
Ideal ratio = 1:3 or higher
This gives you an edge over the long term.
Real-world example — long trade:
- Entry Price: 10,000 USDT
- Stop Loss: 9,800 USDT → Risk = 10,000 - 9,800 = 200 USDT
- Take Profit: 10,600 USDT → Reward = 10,600 - 10,000 = 600 USDT
Calculating the R:R ratio:
600 ÷ 200 = 3
Result = 1:3
Excellent ratio ✅
This means that for every 1 USDT you risk, you earn 3 USDT if the target is reached.
The reward is 3 times the risk.
Why use a 1:3 ratio?
If you win just 1 out of 3 trades, you’ll still be profitable overall!
- Protect your capital from repeated losses
- Improve your success rate over the long term
- Be more disciplined in managing risk
4 golden rules of risk management:
1. Don’t risk more than 2% of your capital
2. Look for trades with a minimum 1:2 ratio, preferably 1:3
3. Stick to your stop loss and don’t move it emotionally
4. Discipline and consistency matter more than any single winning trade
Reminder: Trading success depends on risk management—not just on choosing winning trades.
$RLC
$GTC
$USDT
#BTC☀ #ETH🔥🔥🔥🔥🔥🔥
#bnb
#BinanceSquareFamily
