Risk to Reward Calculator is used for calculating the amount of risk per trade to the amount of reward in return. Risk to Reward or commonly known as risk/reward ratio, Risk and Reward or RR. Risk Reward ratio is used by traders and investors to manage their capital, risk and return for their investment or trading such as in stock trading, Forex trading, futures trading, crypto trading and etc.
Risk Reward ratio is one of the most important consideration before investors or traders decide on investment or make decision on a trade.
Risk to rewards ratio is important to assess the risk of an investment or trade, to reduce the risk of loss as well as helps to assess the expected return and expected risk of a given trade or investment.
Generally, investors or traders will aim for greater expected return, if greater the risk taken. It is recommended Risk to Reward ratio would be 1:2 or 1:3 or more before traders will consider to enter a trade. Higher risk to reward ratio is recommended, typically risk to reward ratio of 1:3 and above is the best.
How to use Risk Reward Calculator?
- Key in your entry price (Long for Buy entry, Short for Sell entry, Eg: Long entry Buy GOLD, 1914.75, then key in this number into “Entry price” column.
- Key in your Target Price(TP) Eg: 1944.75 and Stop Loss(SL) Eg: 1904.75.
- Risk Reward calculator will automatically do the calculation for you.