Risk Reward Ratio Calculator
Easily calculate your potential profit, loss, and risk-to-reward ratio before placing a trade. Use the calculator below to plan better entries and exits and manage risk with precision.
Use a preset or enter your own specs. No live data used.
Need point value help?
What Is a Risk Reward Ratio?
The risk-reward ratio compares how much you’re willing to risk versus how much you could gain on a trade.
-
A 1:2 ratio means you risk $1 for the chance to make $2.
-
A 1:3 ratio means you risk $1 for the chance to make $3.
This metric helps traders decide whether a trade setup is worth taking. A strong risk-reward ratio can help you stay profitable even if not every trade wins.
How to Use the Risk Reward Calculator
- Enter Entry Price: The price where you plan to open the position.
- Add Stop-Loss Price: The level where you’ll exit if the trade goes against you.
- Add Target Price: The level where you’ll take profits.
- Enter Contract Details: Choose the contract and point value (for futures traders).
- Click Calculate: The tool will show potential risk, reward, and your risk/reward ratio per contract.
This tool works best for futures trading where price levels and position size can be defined.
Improve Your Risk Management
Mastering your risk-to-reward ratio is only the first step. Take what you’ve learned and apply it in real markets using the MetroTrader platform.
Start trading futures with MetroTrade and gain access to:
- Low intraday margins: Trade popular CME futures with less capital required.
- Powerful trading tools: Set stop-loss and take-profit orders directly on your chart.
- Free 30-day demo: Practice with $5,000 in simulated funds before going live.
FAQs
What is a risk reward calculator?
A risk reward calculator is a trading tool that estimates potential profit and loss before entering a trade. By comparing your entry, stop-loss, and target prices, it helps you find the exact risk-to-reward ratio for better trade planning and risk management.
How do you calculate the risk reward ratio?
To calculate the risk reward ratio, subtract your entry price from your stop-loss to find risk, then subtract your entry from your target to find reward. Divide reward by risk to get the ratio. The formula is:
Risk Reward Ratio = (Target − Entry) ÷ (Entry − Stop-Loss)
What is a good risk reward ratio for trading?
A good risk reward ratio is typically 1:2 or higher, meaning you aim to make at least twice what you risk. Many futures traders prefer ratios like 1:3 to maintain profitability even with less than a 50% win rate.
Can I use this risk reward calculator for futures trading?
Yes. MetroTrade’s risk reward calculator is built for futures traders. You can enter contract details and point values to calculate your dollar risk and reward per contract with accuracy.
Why is the risk reward ratio important in futures trading?
The risk reward ratio helps traders manage leverage and avoid oversized losses. Futures contracts can move quickly, so knowing your potential risk and reward before opening a trade supports disciplined, consistent decision-making.