Result
If the after-cost ratio looks bad, resist the urge to tighten the stop — it belongs where the trade idea is invalid. Skip the trade instead.
A trade's risk–reward ratio sets the win rate you need just to break even — and most traders compute it wrong, because they ignore the spread and commission that every trade pays regardless of outcome. On short-range trades, costs can quietly turn a healthy-looking 1:2 into a losing proposition.
This calculator shows the ratio before and after costs, plus the break-even win rate for each — so you can see exactly what the market is charging you to play.
The formula
Raw R:R = target distance ÷ stop distance. After costs, the effective risk grows and the effective reward shrinks by the round-trip cost: effective R:R = (target − costs) ÷ (stop + costs). Break-even win rate = risk ÷ (risk + reward) — at 1:2 you need 33.3%; at 1:1, 50%; at 2:1, 66.7%.
One warning this calculator cannot enforce: never tighten a stop just to improve the ratio. The stop belongs where the trade idea is invalid. Pull it inside normal market noise and the displayed ratio improves while the real one collapses — you simply get stopped out on trades that would have worked.
Frequently asked questions
What is a good risk-reward ratio?
There isn't a universally good one — only combinations of ratio and realistic win rate that clear break-even with margin. 1:2 with a 45% win rate is profitable; 1:3 with a 20% win rate is not. Judge the pair of numbers together, always after costs.
How do I estimate my costs in pips?
Spread plus commission, converted to pips. If your EURUSD spread is 0.8 pips and commission adds the equivalent of 0.6 pips round-trip, enter 1.4. For instruments with wider spreads (gold, indices, crypto) costs are proportionally larger and matter more.
Why does my calculated break-even win rate look so high?
Usually because the target is close and costs are a big share of it. A 5-pip target with 1.5 pips of costs loses 30% of its reward to the house before the market moves. This is the honest math behind why very short-range strategies are so hard to run profitably.
Educational arithmetic, not financial advice. Contract specifications vary by broker — confirm pip and contract values against yours. Trading involves substantial risk of loss; forward-test on a demo account before any live decision.
This math, enforced automatically
RezSync Algo runs these calculations on live broker data for every trade — stop-first sizing, after-cost checks, and a hard drawdown breaker. Demo-first, live strictly opt-in, no promised returns.