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Risk/reward, expectancy and drawdown

Turn entry, stop and target prices into a comparable R multiple and break-even win rate.

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Inputs

Side

Entry price ($)

Stop-loss price ($)

Take-profit price ($)

Account risk ($)

Result

Price risk—

Price reward—

Reward / risk—

Break-even win rate—

Potential profit—

Results update as you type.

Formula and assumptions

R multiple = distance to target ÷ distance to stop. Break-even win rate before fees = 1 ÷ (1 + R).

Worked example

A 2.5R setup risks $100 to target $250 before fees and slippage. A high R does not make a setup probable; it only describes the payoff shape.

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Educational guide

Expectancy scenario calculator

E = p × W − (1 − p) × L − C. Break-even p = (L + C) / (W + L). All values use the same R unit; do not count costs twice. These are model averages, not forecasts.

Inputs

Win rate (%)

Average win (R)

Average loss (R)

Average cost per trade (R)

Result

Gross expectancy (R)—

Net expectancy (R)—

Break-even win rate—

Inputs are processed in this browser; no trading account is connected.

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Drawdown scenario calculator

Drawdown = (peak − equity) / peak. Recovery = peak / equity − 1. Fractional loss series: peak × (1 − fraction)^n. Fixed-dollar series is floored at zero; this simplified model excludes debt, costs, deposits and liquidation. A zero balance has no finite percentage recovery.

Inputs

Reference peak ($)

Current equity ($)

Consecutive modeled losses

Loss fraction per step (%)

Fixed loss per step ($)

Loss-series model

Result

Current drawdown (%)—

Gain needed to recover (%)—

Equity after modeled losses ($)—

Modeled loss-series drawdown (%)—

Inputs are processed in this browser; no trading account is connected.

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Important: TradingHub provides informational tools and scenario estimates, not financial advice. Verify fees, margin rules, availability and current terms with the relevant venue before acting.