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Online Calculators > Financial Calculators > Risk Reward CalculatorRisk Reward CalculatorRisk reward calculator is used to calculate the risk and reward ratio of your investment. The goal of a trader is to minimize risks and maximize rewards. Use the risk reward ratio calculator to assess your risk and reward on any stock you are trying to buy.
What is the risk reward ratio?The risk reward ratio is what many investors use to decide whether or not to make an investment in an opportunity. In real life, a high reward opportunity often comes with high risk. Therefore, we should always judge the risk involved before we think about the potential rewards. For stock traders, a good risk reward ratio should be at least 1:3, meaning if you are risking $1 on a trade, you should expect to get at least $3 in return. Many shortterm stock traders who ignore the riskreward ratio are sure to go bust in the long run.
How to calculate risk reward ratio?To calculate the risk reward ratio for any investment, such as stock, we need to use the current stock price, the potential reward, and the stop loss as our risk. The risk reward formula on how to calculate risk reward ratio is given below.

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