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Risk Analysis05 / 14
Gold Risk/Reward Calculator
Analyze your trade setup before entering. Calculate your R:R ratio and the win rate needed.
- Free
- No sign-up
- Built for XAUUSD
Quick answer
Risk-reward = distance to target ÷ distance to stop. At 1:R you break even with a win rate of 1 ÷ (1 + R), before costs.
Example: buy at 4,100, stop 4,095, target 4,115: 15 ÷ 5 = 1:3, and the break-even win rate is 25%.
Direction
Quick setup
Risk / Reward Ratio
1:2.00
✅ Excellent risk/reward
Risk
30 pips
Reward
60 pips
BE Win Rate
33.3%
Risk / reward
Good1:2.00
Risk / reward
Risk
30 pips
Reward
60 pips
Break-even win rate
33.3%
Trade Assessment
✅ Good — Positive risk/reward. Worth taking.
Tip: Professional traders typically aim for 1:2 or higher risk/reward.
What is a Good Risk/Reward Ratio?
The risk/reward ratio compares the potential loss to the potential gain of a trade. A 1:2 R:R means you risk 1 pip to make 2 pips.
1:3+ Excellent
High-quality setups with strong win potential
1:1 to 1:2 Good
Solid setups — confirm with volatility analysis
< 1:1 Poor
Unfavorable risk profile — consider adjusting
Guide
Risk-reward calculator: one number sets the win rate you need
Formula
R = (target − entry) ÷ (entry − stop) (reverse for shorts)
Break-even win rate = 1 ÷ (1 + R)
| Reward : risk | Win rate to break even |
|---|---|
| 1 : 1 | 50% |
| 1.5 : 1 | 40% |
| 2 : 1 | 33.3% |
| 3 : 1 | 25% |
Example
Entry 4,000, stop 3,990 ($10 risk), target 4,025 ($25 reward): R = 2.5. Any win rate above 28.6% makes money over time.
Don't be fooled by a big ratio
Lin's Take
I built this tool for my own trading desk before sharing it here. Use it almost every session.
FAQ
A good R:R ratio is at least 1:2, meaning you risk 1 pip to gain 2 pips. Ratios of 1:3 or higher are considered excellent.
R:R Ratio = (Take Profit - Entry) ÷ (Entry - Stop Loss) for long trades. For entry at 4100, SL at 4080, TP at 4160 gives a 1:3 R:R ratio.
Break-even win rate = 1 ÷ (1 + R:R Ratio) × 100%. For 1:2 R:R, you need 33.3% win rate. For 1:3 R:R, only 25%. Higher R:R ratios make profitable trading easier.
About 33% before costs. The break-even win rate at 1:R is 1 ÷ (1 + R), so 1:2 needs 1 ÷ 3 and 1:3 needs 25%.
Yes. A trailing stop moves the stop behind the price as the trade gains. In MT4 it runs only while the terminal is open and connected, unless your broker offers it on the server.
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