How this calculator works
The risk/reward ratio measures potential profit per unit of risk. A 1:3 ratio means the take profit is three times further from entry than the stop loss.
This is the foundation of long-term profitability — even a 35% win rate is profitable with consistent 1:3 setups.
Trading example
Long EUR/USD at 1.0850, stop loss 1.0820 (30 pips), take profit 1.0920 (70 pips).
RR = 70 ÷ 30 = 1 : 2.33 — a quality setup.