For Australian traders, the R-multiple ratio tells you if a setup is worth taking before you enter. This calculator converts your stop and target distances into the breakeven win-rate — the minimum percentage of winning trades needed to avoid losing money over time.
How it works
Every trade has two fixed distances: how far you're willing to lose (stop) and how far you hope to gain (target). The R-multiple ratio compares them. From that ratio, we derive the breakeven win-rate — the statistical threshold where wins and losses cancel out, excluding spreads and commissions.
Formula block:
R:R = target distance (pips) / stop distance (pips)
breakeven win-rate = 1 / (1 + R:R)
The formula is pip-agnostic — it works whether you trade EUR/USD at 0.0001 pip steps or USD/JPY at 0.01. Account currency conversion (e.g. AUD-denominated accounts) affects dollar P&L but not the ratio itself. Lot size scales the dollar value linearly; the ratio stays constant.
Worked example
Example: AUD/USD
- Stop distance: 20 pips
- Target distance: 60 pips
We divide the target (60) by the stop (20), giving 3.0. Then we apply the breakeven formula: 1 divided by (1 + 3.0) = 0.25, or 25%.
Result: R:R = 3.0; breakeven win-rate = 25% per trade
At a 3:1 ratio, you need only one winning trade for every three losers to break even. Round-trip costs (spread + commission) will push the actual breakeven slightly higher — typically 1–2% above the theoretical value.
Edge cases
- JPY pairs use 0.01 pip steps (vs 0.0001 for most pairs). The calculator handles this automatically, but double-check your broker's pip definition if you trade USD/JPY or crosses.
- Non-AUD accounts add FX conversion drag. The R:R ratio is unaffected, but the dollar P&L per pip changes daily with exchange rates.
- Mini/micro lots scale linearly. A 0.10 lot (mini) moves 10x less per pip than a standard lot; the ratio and breakeven remain identical.
- Fractional pips (5-digit brokers) don't change the math — just ensure your stop and target are in the same pip unit.
Glossary
- Risk-reward ratio — the ratio of potential profit to potential loss on a trade, expressed as X:1.
- Win-rate — the percentage of trades that close in profit over a given period.
- Expectancy — the average dollar amount you can expect to win or lose per trade, calculated from win-rate and R:R.
FAQ
How accurate is this Risk : Reward Calculator?
The math is exact — the ratio and breakeven formula are deterministic. However, the breakeven win-rate assumes zero transaction costs. Real-world breakeven is 1–2% higher due to spreads and commissions.
Does it work for any broker?
Yes. The R:R calculation is universal — it depends only on pip distances, not on broker-specific pricing or execution models.
What if my pair isn't in the dropdown?
Select "Manual" and enter the pip distance directly. If your pair uses an unusual pip convention, contact us and we'll add it.
Why does the result differ from my broker's panel?
Brokers often include spread and commission in their risk-reward display, or they use a different pip definition (e.g. 4-digit vs 5-digit). Our calculator shows the raw mathematical ratio before broker mark-up.
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