Core concept
Risk/reward compares the distance of risk with expected reward
A ratio of 1 : 2 means that for every 1 unit of risk per share to the stop, the expected reward to the target is 2 units. A long trade treats an increase as reward, while a short trade treats a decrease as reward.
The break-even win rate is a theoretical value based only on the ratio, excluding fees and execution differences. It does not predict a strategy's actual win rate or returns.
Calculation methods
Choose the method that matches the prices and loss limit you know
Risk/reward
Given entry, stop, and target prices, calculate risk and expected reward per share, the ratio, and the break-even win rate.
Required target
Given the entry and stop prices, calculate the target price required for a desired ratio.
Required stop
Given the entry and target prices, calculate the stop price required for a desired ratio.
Position size
Calculate the maximum whole-share quantity within an allowed loss amount or an account risk rate.
Examples
Use the same prices to answer different questions
Risk/reward
Risk/reward 1 : 2.00
Long · entry KRW 50,000 · stop KRW 47,500 · target KRW 55,000
Risk 5.00% · expected reward 10.00% · break-even win rate 33.33%
Required target
Required target KRW 56,250
Long · entry KRW 50,000 · stop KRW 47,500 · desired ratio 1 : 2.5
Applies KRW 6,250 of expected reward to KRW 2,500 of risk per share.
Required stop
Required stop KRW 47,500
Long · entry KRW 50,000 · target KRW 55,000 · desired ratio 1 : 2
Solves for the risk distance that matches KRW 5,000 of expected reward per share.
Position size
Maximum position 40 shares
Account KRW 10,000,000 · account risk 1% · entry KRW 50,000 · stop KRW 47,500
Divides the KRW 100,000 allowed loss by KRW 2,500 of risk per share.
Before using the result
Displayed prices can differ from actual execution
- All prices must be positive and follow the entry, stop, and target relationship for the selected trade direction.
- Reverse calculations retain decimal precision internally, while displayed whole-KRW prices are adjusted so they do not fall below the desired ratio.
- Position size is a whole-share quantity based on the allowed loss. Buying power, margin, and leverage limits are not included.
- The stop is assumed to execute at the entered price. Gaps, slippage, and liquidity can make the actual loss larger.
- Fees and taxes are excluded, and results do not guarantee performance or recommend an investment decision.
Frequently asked questions
Is a higher risk/reward ratio always better?
No. The ratio compares price distances only. It does not assess the probability of reaching the target, the strategy's actual win rate, or market conditions.
What is the break-even win rate?
It is the theoretical win rate that produces zero profit or loss if the same ratio repeats without costs. It does not predict or guarantee an actual win rate.
Why are target and stop prices adjusted to whole KRW?
The internal calculation retains decimal precision, while the screen shows whole-KRW prices. Rounding is applied only in the direction that preserves at least the desired ratio.
Can the maximum quantity be 0 shares?
Yes. If the risk of one share exceeds the allowed loss, no whole-share position fits the limit. This is a valid result, not an input error.
Is the calculated position size a buy or sell recommendation?
No. It mechanically divides the entered allowed loss by the risk to the stop and does not assess volatility, liquidity, or suitability.
What does an account risk rate of 1% mean?
It uses 1% of the entered account amount as the allowed loss for one trade. It does not recommend a suitable rate or assess total account risk.
Can I calculate a short trade?
Yes. Select Short as the trade direction. Short availability, borrowing costs, margin, and leverage are not included.
Is risk/reward the same as Profit Factor?
No. This calculator compares risk and expected reward for one trade. Profit Factor divides gross profit by gross loss across multiple trades.
Does entering a stop price fix the actual loss?
No. The calculator assumes execution at the entered stop. Rapid price moves, gaps, slippage, and limited liquidity can increase the actual loss.
Related tools
Check a target price or recovery requirement
After comparing price distances, calculate the target price for a profit goal or the gain needed to recover from a current loss.