Enter your entry, stop, and target to estimate a reward-to-risk ratio and breakeven win rate. Add an assumed win rate to model expectancy before costs.
A 1:3 setup breaks even at a 25% win rate before costs, assuming each winner reaches the full target and each loser exits at the stop. Fees, spreads, and slippage raise the win rate needed to break even. This tool models those price assumptions; it does not predict results.
A ratio describes entered price distances. Combining it with an assumed win rate gives a hypothetical expectancy, before costs and execution differences.
Target distance divided by stop distance. A 1:3 ratio means the entered target distance is three times the stop distance. Neither level is a guaranteed fill.
The modeled win rate at which gains and losses balance before costs. At 1:3 it is 25%, assuming full target wins and full stop losses. Costs make the net result negative at that threshold.
A hypothetical average based on the entered win rate and fixed win/loss amounts, expressed in R. Positive modeled expectancy is not a prediction: assumptions may not hold, costs reduce results, and finite samples can lose money.
A wider target increases the displayed ratio but may be reached less often. This calculator cannot estimate that probability. Compare assumptions using relevant data and allow for costs and changing conditions.
There is no universally suitable ratio. The estimate depends on an assumed win rate, fixed outcomes, and execution at the entered levels. Costs and changing conditions can turn a positive modeled expectancy negative.
Before costs, a 1:2 ratio breaks even at 33.33%, a 1:3 ratio at 25%, and a 1:1 ratio at 50%. These thresholds assume every winner reaches the target and every loser exits at the stop. Fees, spreads, and slippage raise the threshold.
The ratio compares two price distances in the same units. It does not model product-specific payoffs, leverage, contract specifications, or execution. Dollar outputs assume your entered risk amount correctly represents the position.
No. A larger target distance increases the ratio, but does not establish the chance of reaching that target. The model needs an assumed win rate and excludes costs; a higher ratio alone does not imply better results.
Expectancy here is a hypothetical average in R, based on an assumed win rate and fixed target and stop outcomes. Positive modeled expectancy does not guarantee profit over any sample. Actual win rates, outcomes, costs, and execution may differ from the assumptions.
No. This is a free educational calculator. It doesn’t know your full situation and assumes fixed prices, no slippage, and no fees. Treat the output as a starting point and make your own decisions, ideally with a licensed professional.
SMRT Algo displays chart overlays and reference levels for your own analysis in TradingView. Assess any entry, stop, or target reference against your plan. Displayed levels do not predict outcomes or guarantee execution.
Get SMRT AlgoThis risk/reward calculator is provided for informational and educational purposes only and does not constitute financial, investment, or trading advice. Outputs are based solely on the figures you enter and do not account for slippage, gaps, spreads, commissions, or the difference between an intended and an executed stop.
Trading and investing carry significant risk, and it is possible to lose money. Decisions to buy, sell, or trade any financial instrument should be made with the guidance of a licensed professional. Past performance does not guarantee future results.
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