How to compute the risk-to-reward ratio of a trade

1. Enter entry

   "Entry" is the price you plan to (or did) open at. All three prices must be in the same currency / quote — the tool doesn't normalise across instruments.

2. Enter target and stop

   "Target" is where you'd take profit; "Stop" is where you'd cut losses. The tool uses absolute distances, so target above or below entry both work — direction is inferred from the sign of (entry − stop).

3. Press Run

   Result is riskReward = |target − entry| / |entry − stop|, rounded to 4 decimals. Risk = 0 throws "Risk cannot be 0." — a zero stop distance gives no edge.

4. Read the ratio

   A risk-reward of 2 means you stand to earn $2 for every $1 risked. Pair with a win rate to get expectancy: positive when winRate × reward > lossRate × risk. A 1:3 with 40% win rate breaks even at 25%.