How to Use This Calculator
Before placing any trade, know exactly what you can gain or lose. Enter your trade details to calculate potential profit, potential loss, and your risk-to-reward ratio.
Select your instrument and direction. Choose the forex pair, commodity, or index you are trading. Select Buy/Long if you expect price to rise, or Sell/Short if you expect it to fall.
Enter your price levels. Input your Entry Price, Stop-Loss Price, and Take-Profit Price. These three levels define your trade plan and determine both the profit potential and the maximum risk.
Set your position size. Enter the number of lots or units you intend to trade. You can switch between standard lots, mini lots, micro lots, or raw units to match your broker’s terminology.
Read the results. The calculator instantly shows your potential profit in dollars, your potential loss, the risk:reward ratio, and the minimum win rate needed to stay profitable long-term.
Understanding the Results
Potential Profit. The dollar amount you gain if price reaches your take-profit level. This is your best-case outcome and represents the reward side of your trade.
Potential Loss. The dollar amount you lose if price hits your stop-loss. This represents your actual risk, assuming no slippage or gap through the stop.
Pips to TP / SL. The distance in pips or points from entry to your take-profit and stop-loss levels. For forex, a pip is 0.0001 for most pairs and 0.01 for JPY pairs.
Risk:Reward Ratio. Compares your maximum loss to your potential profit. A ratio of 1:2 means risking $1 to potentially make $2. Higher ratios allow you to be profitable with a lower win rate.
Break-Even Win Rate. The minimum percentage of trades you need to win to avoid losing money at this R:R ratio. At 1:2, you only need to win 33.3% of trades to break even.
The Math Behind the Calculator
All calculations use these formulas:
Worked Example: Long EUR/USD
- Entry: 1.08500 | Stop-Loss: 1.08000 | Take-Profit: 1.09500 | Size: 1 standard lot
- Pips to TP = (1.09500 − 1.08500) ÷ 0.0001 = 100 pips
- Pips to SL = (1.08500 − 1.08000) ÷ 0.0001 = 50 pips
- Pip Value = $10 per pip (EUR/USD standard lot)
- Potential Profit = 100 × $10 = $1,000
- Potential Loss = 50 × $10 = $500
- Risk:Reward = 1:2 | Break-Even Win Rate = 33.3%
Why Risk:Reward Ratio Matters
Many traders focus only on win rate, but profitability depends on the combination of win rate and R:R. A lower win rate with a high R:R can outperform a high win rate with a poor R:R.
| Win Rate | R:R | EV per $1 Risked | Profitable? |
|---|---|---|---|
| 70% | 1:0.5 | +$0.20 | Yes |
| 50% | 1:1 | $0.00 | Break-even |
| 40% | 1:2 | +$0.20 | Yes |
| 30% | 1:3 | +$0.20 | Yes |
| 25% | 1:4 | +$0.25 | Yes |
You do not need a high win rate if your winning trades are significantly larger than your losses. The key is that expected value per trade is positive.