The idea
R is your initial risk: the distance from entry to stop, in money, for the size you took. A result in R is profit or loss ÷ initial risk. A stop hit for the full amount is −1R. A trade that makes twice the risk is +2R. Because the unit is risk, trades of different sizes, markets and account balances can be compared on one scale.
Ten trades in R
An illustrative set (E). Every trade risked $100, so 1R = $100.
| Trade | Result in R | Result at 1R = $100 |
|---|---|---|
| 1 | +2R | $200 |
| 2 | −1R | −$100 |
| 3 | −1R | −$100 |
| 4 | +3R | $300 |
| 5 | −1R | −$100 |
| 6 | +1.5R | $150 |
| 7 | −1R | −$100 |
| 8 | −1R | −$100 |
| 9 | +2R | $200 |
| 10 | −0.5R | −$50 |
Total: +3R ($300). Average per trade: 0.30R. There were 4 winners out of 10 (40%), and the winners made 8.5R against 5.5R lost, a profit factor of 1.55. A trade stopped early for half the risk shows as −0.5R, so R also records when you did not follow the plan.
Average R is expectancy
The average R over many trades is the expectancy in R: what each trade is worth on average per unit of risk. Here that is 0.30R. At a risk of $100 a trade that is $30 per trade on average, in this sample only. Ten trades is far too few to trust; see what is expectancy for how many are needed and profit factor for the related ratio.
How to use R in practice
- Write the risk in money before you enter (stop distance × size). The position size calculator gives it.
- Record the result in R in your trading log.
- Set targets in R. A target of 2R on a stop of 1R is a 1:2 risk to reward ratio.
- Review average R and the worst losing streak in R, not dollars.
Limits
R depends on an honest initial stop. If the stop is moved after entry, record the original risk or the numbers will flatter you. Costs and slippage change the real R, so include them. Past R says nothing certain about future trades.
Try it with your own numbers
Free calculators that do the math for you. No signup, and nothing leaves your browser.
Pre-set for the market you trade
Pip, point and tick values differ by instrument. These calculators start from each one's contract, with worked examples:
Quick questions
What does 1R mean?
The amount you risked on the trade, from entry to stop, in money.
What is a good average R?
Any positive average after costs means a positive expectancy in the sample, but a small sample proves little. Measure it over many trades.
Is R the same as risk to reward?
Related, not the same. Risk to reward is the planned target ÷ stop. R-multiple is the actual result ÷ risk.
Can a trade lose more than 1R?
Yes, through slippage or a gap past the stop. Record it as it happened, for example −1.3R.
Define the risk before the trade.
A stop placed at a real level makes R meaningful. These indicators help you mark it.
Premium indicators come with a 7-day free trial on request: how the trial works.
Keep reading
Last updated November 2026. For education only. Not financial advice.