Risk/Reward Ratio Formula

The Formula

Worked Example

Entry: $2,650, Stop Loss: $2,625, Take Profit: $2,700
Risk = $2,650 - $2,625 = $25
Reward = $2,700 - $2,650 = $50
R:R = $50 / $25 = 2.0 (1:2)
Breakeven Win% = 1 / (1 + 2) x 100% = 33.3%

Python Implementation

from gfil_calculators.position_size import calculate_risk_reward
result = calculate_risk_reward(2650, 2625, 2700, 'long')
print(f"R:R = 1:{{result['rrr']}}, Breakeven: {{result['breakeven_winrate']}}%")