Risk, reward and expectancy
Find out whether a setup actually makes money over many trades, or only makes money on the ones you remember.
Runs entirely in your browserRuns entirely on your device — nothing you type is sent anywhere. Educational only, and not investment advice.
How to use this calculator
Each step names a control you will find on screen above.
- Entry, Stop-loss and Target
The three prices of the trade. The gaps between them give the reward-to-risk ratio, which is the shape of the bet before probability enters.
- How often you are right
Your honest hit rate. Not the one you would like — the one your last fifty trades produced. If you have not counted, assume you are worse than you think; almost everyone is.
- Trade structure
Switch structures to see how the same view expressed differently changes the arithmetic. A wider target with a lower hit rate can beat a tight one that wins often.
- Read expectancy, not the ratio
The headline number is expected rupees per trade. A 5:1 setup that works one time in ten is a losing system, and only expectancy shows that.
Worked example: A 3:1 setup that wins a quarter of the time
Entry ₹500, stop ₹480, target ₹560. You have checked your record and you are right about 25% of the time.
What to enter
- Entry
- ₹500
- Stop-loss
- ₹480
- Target
- ₹560
- How often you are right
- 25%
What it shows you
- Risk per share
- ₹20
- Reward per share
- ₹60
- Reward : risk
- 3 : 1
- Break-even win rate
- 25%
- Expectancy
- ₹0 per share
1 ÷ (1 + 3)
(0.25 × 60) − (0.75 × 20)
Where this is taught
A calculator gives you a number. These explain what the number means and when it misleads you.
- Technical Analysis12 minEntries, exits and managing a live tradeEveryone plans the entry. Almost nobody plans the exit — which is why most people hold losers and sell winners.
- Technical Analysis11 minFrom signals to a systemThe six components every complete system needs, and why most people never write theirs down.
- Technical Analysis12 minWhere to take profitEntries get all the attention and exits decide the outcome. Four ways to set a target, and why the best traders mostly do not use targets at all.
- Technical Analysis12 minBacktesting without fooling yourselfEvery strategy looks brilliant on past data. The specific ways a backtest lies, and the checks that separate an edge from a coincidence.
- Technical Analysis13 minClassical chart patternsHead and shoulders, double tops, triangles, flags and cup-and-handle — what each one is really describing, and how to measure a target.