Risk-Reward Calculator
Set your entry, stop-loss and target, and see what is actually at stake before a position is opened rather than afterwards.
Validate the setup, size the position and map its price and capital impact.
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Risk–reward arithmetic describes payoff size, not probability, liquidity or execution quality. Stops can fill worse than entered during gaps, targets may never trade, and repeated outcomes are not guaranteed to match the mathematical break-even rate.
Educational planning only. This calculator evaluates price and capital arithmetic for a setup you enter; it does not select a security, place an order or recommend a trade.
What the ratio measures
Before entering a position, three prices define it: where you enter, where you would exit if you are wrong, and where you would exit if you are right. The reward-to-risk ratio compares the second two.
It answers a single question — how much are you prepared to lose in order to pursue how much gain?
The formulas
Risk per share = | Entry price − Stop-loss price |
Reward per share = | Target price − Entry price |
Total risk = Risk per share × Quantity
Total reward = Reward per share × Quantity
Reward-to-risk ratio = Reward per share ÷ Risk per share
A worked example
Entry at ₹820, stop-loss at ₹780, target at ₹940, position size 150 shares:
- Risk per share: 820 − 780 = ₹40
- Reward per share: 940 − 820 = ₹120
- Total risk: ₹40 × 150 = ₹6,000
- Total reward: ₹120 × 150 = ₹18,000
- Reward-to-risk ratio: 1 : 3.00
- Risk as a share of entry price: 4.88%
For every rupee at risk, three are being pursued.
Why the ratio and the win rate work together
Neither number means much alone. A ratio of 1:3 means you can be wrong more often than right and still come out level.
At 1:3, breaking even requires being right just 25% of the time. At 1:2, 33%. At 1:1, you need 50%, which leaves no room for costs.
This is the reason the ratio is worth calculating before entering rather than after. It sets the standard your judgement has to meet.
What this calculator does not do
It does not tell you where to put your stop-loss, where to set a target, or whether the position makes sense. Those are decisions requiring analysis of the specific situation, and no calculator can make them.
It also assumes your stop executes at the price you set. In a fast-moving or illiquid market, a stop can trigger at a worse price than intended. Actual losses can exceed the figure shown.
RegalTicker is not a SEBI-registered Research Analyst or Investment Adviser. This tool supports planning arithmetic only. It is not a recommendation to enter any position, and nothing here implies an outcome.
Related: 10 Stock Market Mistakes Beginners Should Avoid · What Is Technical Analysis?
Frequently asked questions
What is a good reward-to-risk ratio?
Many traders use 1:2 as a minimum, on the reasoning that it allows a win rate below 50% to remain viable. There is no correct figure. It depends on strategy, time frame and how consistently a given approach identifies opportunities.
Should the stop-loss always sit below the entry price?
For a long position, yes, because the stop limits the downside. For a short position the stop sits above the entry and the target below it. This calculator uses absolute differences, so it handles both.
Does a good ratio make a position likely to succeed?
No. The ratio describes the arithmetic of the plan, not the probability of it working. A 1:5 ratio on a poorly reasoned idea is still a poorly reasoned idea.
How large should my position be?
That is a risk management question rather than a ratio question. Many practitioners cap the amount at risk on any single position at a small percentage of total capital. The right figure depends on your circumstances and is worth discussing with a qualified adviser.