{"success":true,"version":"v1","request":{"tool":"get_calculator_schema","calculator_id":"risk-reward-ratio"},"result":{"entity_type":"calculator","id":"risk-reward-ratio","calculator_id":"risk-reward-ratio","canonical_url":"https://tttkmbb.com/investing/risk-reward-ratio","name":"Risk/Reward Ratio Calculator","title":"Risk/Reward Ratio Calculator – Reward per Unit of Risk and Break-Even Win Rate","category":"investing","category_name":"Investing & Real Estate","tool_name":"calculate_risk_reward_ratio","featured_mcp_tool":false,"description":"Computes the risk and reward per share from an entry, stop-loss and target price, the reward-to-risk ratio and the win rate at which such trades break even.","use_when":"You are planning a trade with a stop and a target and want to know whether the potential gain justifies the risk, or the minimum hit rate the setup needs.","do_not_use_when":"You need the number of shares to trade (use position-sizing) or the expected value of a bet with known odds. Informational only; not financial advice.","inputs":[{"name":"entry_price","label":"Entry price","type":"number","required":true,"max":1000000000,"exclusive_min":0,"description":"Planned entry price per share or unit.","example":100},{"name":"stop_loss_price","label":"Stop-loss price","type":"number","required":true,"min":0,"max":1000000000,"description":"Exit price if the trade goes wrong (below entry for a long, above for a short).","example":95},{"name":"target_price","label":"Target price","type":"number","required":true,"min":0,"max":1000000000,"description":"Planned profit-taking price on the opposite side of the entry from the stop.","example":115}],"outputs":[{"name":"risk_per_unit","label":"Risk per share","type":"number","decimals":4,"description":"|entry_price − stop_loss_price|."},{"name":"reward_per_unit","label":"Reward per share","type":"number","decimals":4,"description":"|target_price − entry_price|."},{"name":"risk_reward_ratio","label":"Reward-to-risk ratio","type":"number","decimals":2,"description":"reward_per_unit / risk_per_unit."},{"name":"ratio_text","label":"Ratio","type":"string","decimals":4,"description":"The ratio written as reward : risk, e.g. '3 : 1'."},{"name":"risk_percent_of_entry","label":"Risk as % of entry","type":"number","unit":"%","decimals":2,"description":"risk_per_unit / entry_price × 100."},{"name":"reward_percent_of_entry","label":"Reward as % of entry","type":"number","unit":"%","decimals":2,"description":"reward_per_unit / entry_price × 100."},{"name":"breakeven_win_rate_percent","label":"Break-even win rate","type":"number","unit":"%","decimals":2,"description":"100 / (1 + risk_reward_ratio): the share of winning trades at which expected profit is zero."},{"name":"direction","label":"Direction","type":"string","decimals":4,"description":"Long when the target is above the entry, short when below."}],"input_schema":{"type":"object","properties":{"entry_price":{"description":"Planned entry price per share or unit.","type":"number","maximum":1000000000,"exclusiveMinimum":0,"examples":[100]},"stop_loss_price":{"description":"Exit price if the trade goes wrong (below entry for a long, above for a short).","type":"number","minimum":0,"maximum":1000000000,"examples":[95]},"target_price":{"description":"Planned profit-taking price on the opposite side of the entry from the stop.","type":"number","minimum":0,"maximum":1000000000,"examples":[115]}},"additionalProperties":false,"required":["entry_price","stop_loss_price","target_price"]},"output_schema":{"type":"object","properties":{"risk_per_unit":{"description":"|entry_price − stop_loss_price|.","type":"number"},"reward_per_unit":{"description":"|target_price − entry_price|.","type":"number"},"risk_reward_ratio":{"description":"reward_per_unit / risk_per_unit.","type":"number"},"ratio_text":{"description":"The ratio written as reward : risk, e.g. '3 : 1'.","type":"string"},"risk_percent_of_entry":{"description":"risk_per_unit / entry_price × 100. Unit: %.","type":"number","x-unit":"%"},"reward_percent_of_entry":{"description":"reward_per_unit / entry_price × 100. Unit: %.","type":"number","x-unit":"%"},"breakeven_win_rate_percent":{"description":"100 / (1 + risk_reward_ratio): the share of winning trades at which expected profit is zero. Unit: %.","type":"number","x-unit":"%"},"direction":{"description":"Long when the target is above the entry, short when below.","type":"string"}}},"formula":"risk = |entry_price − stop_loss_price|; reward = |target_price − entry_price|; risk_reward_ratio = reward / risk; breakeven_win_rate_percent = 100 / (1 + risk_reward_ratio)","method":"Planned (not realised) risk and reward, ignoring commissions, slippage and the chance that price gaps through the stop; the break-even rate assumes every trade ends at either the stop or the target. Informational mathematics only; not financial advice.","sources":[{"name":"Wikipedia – Risk return ratio","url":"https://en.wikipedia.org/wiki/Risk_return_ratio","type":"reference","retrieved_at":"2026-09-24"},{"name":"Britannica Money – Calculating position size in trading","url":"https://www.britannica.com/money/calculating-position-size","type":"reference","retrieved_at":"2026-09-24"}],"freshness":{"type":"static","max_age_seconds":null,"note":"Deterministic formula with fixed constants; results never go stale. Inputs supplied by the caller determine the output."},"examples":[{"name":"Long: entry 100, stop 95, target 115","inputs":{"entry_price":100,"stop_loss_price":95,"target_price":115},"expected":{"risk_per_unit":5,"reward_per_unit":15,"risk_reward_ratio":3,"ratio_text":"3 : 1","risk_percent_of_entry":5,"reward_percent_of_entry":15,"breakeven_win_rate_percent":25,"direction":"Long (stop-loss below entry)"},"url":"https://tttkmbb.com/api/v1/calculate/risk-reward-ratio?entry_price=100&stop_loss_price=95&target_price=115"},{"name":"Short: entry 50, stop 53, target 44","inputs":{"entry_price":50,"stop_loss_price":53,"target_price":44},"expected":{"risk_per_unit":3,"reward_per_unit":6,"risk_reward_ratio":2,"ratio_text":"2 : 1","breakeven_win_rate_percent":33.33,"direction":"Short (stop-loss above entry)"},"url":"https://tttkmbb.com/api/v1/calculate/risk-reward-ratio?entry_price=50&stop_loss_price=53&target_price=44"}],"faq":[{"q":"Is the ratio quoted as risk:reward or reward:risk?","a":"Traders say 'risk/reward of 1:3' meaning 1 unit risked for 3 gained; this calculator reports the reward per unit of risk (3) and writes it as '3 : 1'."},{"q":"How is the break-even win rate derived?","a":"With win rate p, expected profit per trade is p × reward − (1 − p) × risk; setting it to zero gives p = risk / (risk + reward) = 1 / (1 + ratio)."}],"tags":["risk reward ratio","reward to risk","breakeven win rate","trade planning","stop loss target"],"related":[{"calculator_id":"position-sizing","reason":"Number of shares for the chosen risk."},{"calculator_id":"stock-profit","reason":"Profit at the target after commissions."},{"calculator_id":"expected-value","reason":"Expected value of an outcome with given probabilities."}],"links":{"html":"https://tttkmbb.com/investing/risk-reward-ratio","markdown":"https://tttkmbb.com/investing/risk-reward-ratio.md","json":"https://tttkmbb.com/investing/risk-reward-ratio.json","api":"https://tttkmbb.com/api/v1/calculate/risk-reward-ratio","schema":"https://tttkmbb.com/api/v1/calculators/risk-reward-ratio","openapi":"https://tttkmbb.com/openapi.json","mcp":"https://tttkmbb.com/mcp"},"version":"v1","updated_at":"2026-09-24"},"timestamp":"2026-09-24T03:50:53Z"}