Stop Loss / Take Profit Calculator
Calculate your maximum dollar risk, potential reward, R-multiple, and breakeven win rate for any trade using entry price, stop loss, take profit, and position size.
Risk/Reward Formulas
Max Risk = |Entry - Stop Loss| × Position Size
Max Reward = |Take Profit - Entry| × Position Size
R-Multiple = Reward ÷ Risk
Breakeven Win Rate = 1 ÷ (1 + R-Multiple)
Worked Examples
Example 1: Long trade with a 2:1 reward-to-risk
You buy a stock at $100.00 with a stop loss at $95.00 and a take profit at $110.00. Your position size is 100 shares.
- Risk Per Share = |$100.00 - $95.00| = $5.00
- Reward Per Share = |$110.00 - $100.00| = $10.00
- Max Risk = $5.00 × 100 = $500.00
- Max Reward = $10.00 × 100 = $1,000.00
- R-Multiple = $10.00 ÷ $5.00 = 2.00 R
- Breakeven Win Rate = 1 ÷ (1 + 2.00) = 33.3%
Example 2: Short trade with a 2.5:1 reward-to-risk
You short a stock at $50.00 with a stop loss at $52.00 and a take profit at $45.00. Your position size is 200 shares.
- Risk Per Share = |$50.00 - $52.00| = $2.00
- Reward Per Share = |$45.00 - $50.00| = $5.00
- Max Risk = $2.00 × 200 = $400.00
- Max Reward = $5.00 × 200 = $1,000.00
- R-Multiple = $5.00 ÷ $2.00 = 2.50 R
- Breakeven Win Rate = 1 ÷ (1 + 2.50) = 28.6%
How to Use This Calculator
- Choose your trade direction — select Long if you're buying, Short if you're selling short.
- Enter your entry price — the price at which you plan to open the position.
- Set your stop loss price — the price where you'll exit to limit losses. Below entry for longs, above entry for shorts.
- Set your take profit price — the price where you'll exit to lock in gains. Above entry for longs, below entry for shorts.
- Enter your position size — the number of shares, contracts, or units you plan to trade.
- Click Calculate — the calculator returns your max dollar risk, max dollar reward, R-multiple, and breakeven win rate.
Frequently Asked Questions
- What is a good risk/reward ratio?
- Most traders aim for at least a 2:1 reward-to-risk ratio, meaning your potential profit is at least twice your potential loss. This allows you to be profitable even if you win less than half your trades. Some strategies target 3:1 or higher, but the key is consistency between your ratio and your win rate.
- Should I use a fixed stop loss or ATR-based?
- A fixed dollar or percentage stop is simpler but doesn't adapt to volatility. ATR-based stops (e.g., 1.5x ATR below entry) adjust to how much the asset typically moves, reducing the chance of being stopped out by normal price noise. ATR-based stops are generally preferred for swing and position trades.
- What is an R-multiple?
- An R-multiple measures a trade's reward relative to its risk. "1R" means you gained exactly as much as you risked. "2R" means you gained twice your risk. Negative R-multiples indicate losses. Tracking R-multiples across all trades helps you evaluate your edge independently of position size.
- How do I determine the right take profit level?
- Common methods include targeting key support/resistance levels, using a fixed R-multiple (e.g., always targeting 2R), using Fibonacci extensions, or scaling out at multiple levels. The best approach depends on your trading style — the important thing is having a plan before you enter.
- What does breakeven win rate mean?
- Breakeven win rate is the minimum percentage of trades you need to win to avoid losing money over time, given your risk/reward ratio. For example, with a 2:1 R-multiple, you only need to win 33.3% of trades to break even. If your actual win rate exceeds this threshold, you have a positive edge.
Related Tools
Position Size Calculator
Size your position based on fixed account risk
Kelly Criterion Calculator
Calculate optimal position sizing based on your edge
Breakeven Calculator
Find minimum win rate at any R-multiple
Risk of Ruin Calculator
Calculate probability of blowing your account
Not sure which concept you need? Compare Stop Loss vs Risk of Ruin →
Want the full context? See the full trade planning workflow →