Stock market tool
Risk Reward Calculator
Compare the potential reward of a trade with the risk to your stop-loss.
Enter price levels
How to Use the Risk-Reward Calculator
Enter your entry price, stop-loss price, and target price. The calculator instantly shows your risk-reward ratio. A good risk-reward ratio helps you decide whether a trade is worth taking before you enter the market.
Why Risk-Reward Ratio Matters
A risk-reward ratio of 1:3 means you risk Rs 1 to potentially earn Rs 3. Professional traders in India typically look for trades with at least 1:2 or 1:3 ratios. Even if you win only 40% of your trades, a 1:3 risk-reward ratio still gives you a profitable edge. This is the foundation of disciplined trading.
Frequently asked questions
What is a good risk-reward ratio?
There is no universal number. It must fit your strategy, win rate, costs and risk tolerance.
Is a high ratio enough to take a trade?
No. A ratio is only one input and does not predict whether a trade will succeed.
Related Tools
Explore more free calculators for Indian professionals:
- Position Size Calculator — Calculate ideal position size for trades.
- Brokerage Calculator — Calculate stock brokerage and transaction costs.
- Stock P&L Calculator — Calculate profit or loss on stock trades.
- Stock Average Calculator — Calculate average buy price of stocks.