Forex Reward/Risk Calculator

Reward/Risk Calculator

This forex reward to risk calculator allows you to calculate the reward/risk parameters of a forex trading setup/forex signal that you wish to trade. It will help you quickly assess any trade opportunity that your forex trading system generates or any trading recommendation/forex signal that you receive from your forex signals/strategies provider.

It is best to trade forex setups with the highest reward/risk ratio. The minimum acceptable reward/risk ratio should be greater than 2.0. We implemented the marking system which separates mediocre setups from acceptable and outstanding opportunities by marking the reward/risk ratios with “!” signs based on the attractiveness of the trading opportunities. The marking is performed as follows:

  • Trading setups with Reward/Risk ratio less than 2 – are ignored
  • Trading setups with Reward/Risk ratio greater than 2 – are marked with     !
  • Trading setups with Reward/Risk ratio greater than 4 – are marked with    !!
  • Trading setups with Reward/Risk ratio greater than 6 – are marked with    !!!

You can change all the cells that are coloured in red.

The calculator is made up of three parts which are described in detail below:

1. Single Exit Reward/Risk Calculator

This calculator calculates the attractiveness of the buy and sell setups which contain only one entry and exit point. This calculator can be used for quick assessment of any trading opportunity that you encounter. Please note that you should never trade incomplete forex trading setups/signals or recommendations where either Take-Profit or Stop-Loss is missing. The Reward/Risk field might show the following message – “Please Correct” which means that one of the price levels that you have entered either violates the vertical alignment or is missing.

2. Multiple Exit Reward/Risk Calculator

This calculator lets you to evaluate multiple stop-loss/take-profit scenarios for a single buy or sell entry point. Both Buy and Sell sections contain the slots for the maximum of 3 Take-Profit (denoted as “TP”) and 3 Stop-Loss (denoted as “SL”) levels which can be cross-compared to identify the reward/risk ratio for the maximum of 9 possible combinations (which are presented in the respective tables of the Reward/Risk Matrix). You can calculate the attractiveness of any number of Take-Profit and Stop-Loss levels – meaning you are not required to fill all of the 6 slots to populate the Reward/Risk Matrix (as long as you have entered at least one Take-Profit or Stop-Loss level – along with the Entry Price).

The Take-Profit and Stop-Loss levels are numbered in ascending order starting with the closest ones to the Entry Price.

The Status fields can show either:
“OK” - In this case the Reward/Risk Matrix is populated.
Please Correct” – This means that one of the price levels that you have entered either violates the vertical alignment or is missing. Reward/Risk Matrix will not be populated until you correct your entry.

The Reward/Risk Matrix shows the Reward/Risk parameters for all possible combinations of Take-Profit and Stop-Loss levels that you have entered. The upper-left cell displays the entry price which is used to populate this table.

3. Partial Exit Reward/Risk Calculator

This calculator allows you to calculate the cumulative reward/risk ratio – when you perform partial exit from a Buy or a Sell position at up to 5 consecutive Take-Profit levels. This calculator is helpful in seeing what your final return will be if you closed certain percentages of your initial position at different price levels (it is worth mentioning that the micro-lot trading accounts are best suited for partial exit strategy). You can set any percentage (in the % Profit Taken column) next to each of the Take-Profit levels – as long as their TOTAL is equal to 100%.  Partial RERI column calculates the individual reward/risk ratios for each of the Take-Profit levels. The Cumulative R/R sums the values in the Partial RERI column.

The Status fields can show either:
“OK” - In this case the Cumulative R/R will be calculated.
Please Correct” – This can mean one of the following: percentage TOTAL is not equal to 100%, one of the price levels that you have entered violates the vertical alignment or is missing.

 

Reward to Risk Calculator  
         
Single Exit  Reward/Risk  Calculator  
BUY SELL  
Take Profit (TP) Stop-Loss (SL)  
Buy at Sell at  
Stop-Loss (SL) Take Profit (TP)  
Reward/Risk Reward/Risk  
         
Multiple Exit  Reward/Risk  Calculator  
BUY SELL  
TP 3 SL 3  
TP 2 SL 2  
TP 1 SL 1  
Buy at Sell at  
SL 1 TP 1  
SL 2 TP 2  
SL 3 TP 3  
Status: Status:  
         
Reward/Risk Matrix:  
BUY  
SL 1 SL 2 SL 3  
TP 1  
TP 2  
TP 3  
SELL  
SL 1 SL 2 SL 3  
TP 1  
TP 2  
TP 3  
         
Partial Exit  Reward/Risk  Calculator  
BUY  
Level Type Price % Profit Taken Partial RERI  
TP 5  
TP 4  
TP 3  
TP 2  
TP 1  
Buy at    
SL 1      
Status: Cumulative R/R:  
SELL  
Level Type Price % Profit Taken Partial R/R  
SL 1      
Sell at    
TP 1  
TP 2  
TP 3  
TP 4  
TP 5  
Status: Cumulative R/R: