Risk/reward calculator

• Risk is what you lose per unit if the stop is hit, including entry and exit fees. Reward is what you win per unit at the take profit, after both fees. The ratio is one divided by the other, in R.
• The break-even win rate comes from the ratio: at 2 R, winning one trade in three is enough to break even.
• The stop and the take profit fill exactly at their price, and every trade risks the same. A stop market order can fill at a worse price if the market gaps.

What you lose if the stop is hit. A 3 R trade wins three times what it risks if it hits the take profit.

It depends on how often you're right. At 1 R you need to win more than half; at 3 R, more than one in four. What matters is the combination of both, which is what the calculator shows as the average per trade.

Because you pay them on entry and on exit, win or lose. With a stop very close to the entry, fees are a big part of what you risk, and the real ratio drops.