Does anyone know which is the best calculator for position size/risk reward?

Question

Yessenia · Accepted Answer

The Breakeven Win Rate is calculated through the Risk to Reward Ratio, which measures how much your potential reward is, for every unit risk you take.The Risk is the distance from the entry price to the stop loss and represents the risk you are willing to take on this trade, or in other words, the amount you are comfortable with losing. It can be expressed in pips (if you trade forex) or cents (if you trade shares or cryptocurrencies). The Reward is the distance from the entry price to the profit target. It is the potential profit that you expect from the position.A 1:2 RR Ratio means that for every one currency unit risked, you expect to win two units. The same ratio can be expressed in different way.2:4, 10:20, 120:240 – all of these are one and the same ratio.Another way to use the calculator is to fill in the stop-loss and take-profit amounts. Just input them directly. For example, if your position holds $100 risk and $250 potential profit, the calculator will compute the Breakeven Win Rate, using these two amounts.Calculations:It is not enough to just have many winning trades. How much you win when you’re right and how much you lose when you’re wrong is essential for your success. This is exactly what the Breakeven Win Rate gives you. It is calculated through the following formula:Breakeven Win rate = Risk Rate / (Risk Rate + Reward Rate)So, if we have risk/reward ratio of 2:82 / (2 + 8) = 0.20 or 20 %This result shows that 20 % of all trades need to be winners for the trading system to be profitable.

Does anyone know which is the best calculator for position size/risk reward?

1 Answer

1 Answer

Does anyone know which is the best calculator for position size/risk reward?

1 Answer

1 Answer

Welcome back

Create Account

Reset password