Pricing a trade before you enter it takes two subtractions and one division: entry minus stop is the risk per share, target minus entry is the reward per share, and the quotient is the number printed next to every chart before the buy click. On the defaults, an entry of 100 against a stop of 90 and a target of 120 makes a 10 dollar risk and a 20 dollar reward, and the blue card reads 1 : 2.00. Risk/Reward Ratio Calculator runs in the browser and uploads nothing: direction, entry, stop, target, and position size go in, and the page returns the per share risk and reward, the ratio, the required win rate, the totals at your size, and an evaluation. No position number leaves the tab.
This article walks the numbers in the order an entry decision needs them: the 1 : 2.00 ratio and the 33.3 percent required win rate from five inputs, where the three prices come from when the stop is not a round number, how a 10 dollar per share risk becomes a share count and a dollar cap, and how the per trade number compounds into expectancy, profit factor, and drawdown.
What the Ratio Actually Measures: two subtractions, one division
The ratio is reward divided by risk. On the defaults, 120 minus 100 is 20, 100 minus 90 is 10, and 20 over 10 is 2, printed as 1 : 2.00. The reading is units: for every 1 dollar the trade can lose, the plan pays 2 dollars if it reaches the target. The direction toggle flips both subtractions. On a short, risk is stop minus entry and reward is entry minus target, so the same three prices price a mirrored trade. The guards are structural: a long with the stop at or above entry, or the target at or below entry, returns no result, because such a setup has no risk zone to divide. The evaluation tiers the ratio: 3 or more is excellent, 2 or more is good, 1 or more is fair, below 1 is poor, and the default 2.00 lands on good.
Five Inputs, Four Headline Cards
The five inputs are direction, entry price, position size, stop loss, and take profit. The arithmetic outputs four headline cards: 10.00 red risk per share, 20.00 green reward per share, 1 : 2.00 blue ratio, and 33.3 percent purple required win rate. The lower row holds the percentages against entry, 10.00 percent risk and 20.00 percent reward, and the dollar totals at a 100 share size, 1,000 at risk against 2,000 at reward. The chart under the cards draws the three prices as a vertical ladder: target line green at 120, entry line blue at 100, stop line red at 90, the reward zone shaded between entry and target and the risk zone between stop and entry, so the ratio is visible before it is read.
The Required Win Rate: 1 : 2.00 Needs Only 33.3 Percent
The required win rate is 1 over 1 plus the ratio. At 2.00 that is 1 over 3, printed as 33.3 percent: the strategy breaks even when it wins one trade in three, because each win pays 2 units and each loss costs 1. The win rate table runs nine ratios from 1 : 0.50 to 1 : 5.00 in two columns. The break even column falls from 66.7 percent at 1 : 0.50 through 50.0 percent at 1 : 1.00 to 33.3 percent at 1 : 2.00 and 25.0 percent at 1 : 3.00. The second column prices the same row at a flat 50 percent win rate: 1 : 1.00 sits at 0.0 percent, the active 1 : 2.00 row at plus 50.0 percent, and 1 : 3.00 at plus 100.0 percent. The table is the argument that the ratio, not the win rate alone, sets the bar: at 40 percent accuracy a 1 : 1.00 setup loses money while a 1 : 2.00 setup stays positive.
Where the Three Prices Come From
The entry, stop, and target are the only inputs that carry a view, and a round stop of 90 under a 100 entry is the one case where no derivation is needed. Stop Loss / Take Profit Calculator generates the two exit prices from the entry: a percentage mode turns a 5 percent stop and a 10 percent target into 95 and 110 on a 100 entry, a fixed price mode keeps them as levels, and the break even line shows where the position stops losing. When the level should follow the instrument instead of a round number, ATR Stop Loss Calculator sets the stop at entry minus a multiple of the average true range: on an entry of 150 with an ATR of 3.5, a 2x multiple lands the stop at 143, a 4.67 percent risk, and the levels table runs the same math at 1x, 1.5x, 2.5x, and 3x so the stop distance is a volatility measurement rather than a guess.
From Per Share to Per Trade: Sizing the Position
The 10 dollar per share risk is a rate, not a budget. Position Sizing Calculator works the size question in reverse: fix the dollars you will lose if the stop prints, say 1 percent of a 10,000 account, and it backs out the share count, so the 100 shares here become a number the arithmetic defends. Kelly Criterion Calculator goes one step further and sizes by edge: at a 40 percent win rate with an average win of 20 and an average loss of 10, the Kelly fraction is 10 percent of bankroll at full Kelly, and the default half Kelly prints a 500 dollar bet on the 10,000 account, half the distance to the volatility that full sizing invites.
From Per Trade to Strategy: Expectancy, Profit Factor, Drawdown
One trade is a ratio; a strategy is an average. Trading Expectancy Calculator prices the average: at a 50 percent win rate with a 20 average win and a 10 average loss, expectancy is plus 5 per share per trade, or plus 0.5 units of risk, and the break even win rate for that 2 to 1 payoff prints at 33.3 percent, the same line the table above drew. Profit Factor Calculator reads the same history as gross wins over gross losses: ten trades with four wins of 20 and six losses of 10 give 80 over 60, a 1.33 factor at a 40 percent win rate, and the same ten trades at a 5 to 5 record give 100 over 50, a 2.0 factor. Drawdown Calculator takes the price series from peak to trough and prices the losing streak the other two tools assume: five consecutive stops at 1 percent account risk per trade is a 5 percent drawdown, with the recovery leg back to the prior peak measured on the same series. The risk reward ratio is the screen, the win rate table is the bar, the sizing tools are the budget, and the strategy tools are the audit. The calculator does not enter the trade; it makes the trade a number you can refuse.