What is a risk-to-reward ratio in forex trading?

The risk-to-reward ratio in forex trading compares the potential loss of a trade (risk) to the potential profit (reward). It helps traders determine whether a trade is worth taking.

How do I calculate risk-to-reward ratio?

You calculate the risk-to-reward ratio by dividing the number of pips at risk by the number of pips you expect to gain. For example, if your stop-loss is 50 pips away and your take-profit is 100 pips, your ratio is 1 to 2.

What is a good risk-to-reward ratio?

A common recommendation is a risk-to-reward ratio of at least 1 to 2, meaning you aim to make twice as much as you are risking. This helps maintain profitability even with moderate win rates.

Can I use this calculator for other markets besides forex?

Yes, this calculator can be used for any market where you know your entry, stop-loss, and take-profit levels. It's commonly used in forex, but also works for stocks, crypto, and indices.

What if my stop-loss and entry are the same?

If your stop-loss is equal to your entry price, your risk is zero. Since you can't have a zero-risk trade, the calculator will display an error to alert you.

Risk-to-Reward Ratio Calculator

Entry Price: Stop-Loss Price: Take-Profit Price:

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