# Risk/reward ratio and position size calculator for crypto > Work out risk/reward ratio and position size from entry, stop and target. A free calculator, the formulas, break-even win rates and a note on liquidation price. URL: https://tradeagentio.com/en/risk-reward-ratio Language: en Updated: 2026-11-10 > **Short answer.** The **risk/reward ratio (R:R)** compares what you lose if your stop is hit with what you gain at your target: R:R = |target − entry| ÷ |entry − stop|. A 1:2 trade risks 1 to make 2. **Position size** follows from how much you are willing to lose: size = (account × risk %) ÷ |entry − stop|. ## Risk/reward and position size calculator _(An interactive calculator is available on the web page.)_ ## The formulas ``` Risk per unit = |entry − stop| Reward per unit = |target − entry| Risk/reward (R) = reward per unit ÷ risk per unit Amount at risk = account × risk % Position size = amount at risk ÷ risk per unit Break-even win rate = 1 ÷ (1 + R) (before fees) ``` The break-even win rate shows how often a strategy must win just to stay even: | Risk/reward | Break-even win rate | |---|---| | 1 : 1 | 50% | | 1 : 1.5 | 40% | | 1 : 2 | 33.3% | | 1 : 3 | 25% | Fees, funding and slippage push the real number higher, so a strategy that looks fine on paper can still lose money. ## Worked example Account 10,000 USD, risk 1% per trade, so the amount at risk is 100 USD. A long on BTC/USDT with entry 75,776.80, stop 74,661.18 and target 78,231.16: - Risk per unit = 75,776.80 − 74,661.18 = 1,115.62 - Reward per unit = 78,231.16 − 75,776.80 = 2,454.36 - R:R = 2,454.36 ÷ 1,115.62 ≈ 2.2, so 1 : 2.2 - Position size = 100 ÷ 1,115.62 ≈ 0.0896 BTC These are the figures on the plan card of a real tradeagentio screenshot, shown here only to illustrate the arithmetic. ![tradeagentio agent plan card: long, entry 75,776.80, stop 74,661.18, target 78,231.16, risk reward 1 to 2.2, position 0.0896 BTC, risk amount 100 dollars (1%), leverage 10x and estimated liquidation](https://tradeagentio.com/site/img/en/plan.webp) *The agent's plan card: entry, stop, target, risk/reward, position size from the risk amount, leverage and estimated liquidation. Not a trade recommendation.* ## What is a good risk/reward ratio? There is no universal answer. It depends on your win rate: a strategy that wins 60% of the time can be profitable at 1 : 1, while one that wins 30% needs about 1 : 2.4 or better. Many traders look for at least 1 : 2 before taking a trade, but a high ratio is worthless if the target is unrealistic. Judge targets by where price has actually reacted, for example the next [support or resistance](https://tradeagentio.com/en/support-and-resistance) level or opposite liquidity. ## Where to put the stop Place the stop where the idea is wrong, not where the loss looks comfortable. For example, beyond an [order block](https://tradeagentio.com/en/order-block) or beyond the swing that failed, with some room for noise (many traders use a multiple of the average true range). Then let the stop distance decide the position size, as in the formula, instead of picking a size first. ## Leverage and liquidation Leverage does not change the risk/reward ratio of a trade, which depends on entry, stop and target only. It changes how much margin you post and how close the liquidation price is. On an isolated position, a rough estimate for a long is `entry × (1 − 1 ÷ leverage)`, so at 10x about a 10% adverse move liquidates the position, a little less once maintenance margin and fees are included. Exchanges publish exact formulas. Your stop must sit well before the liquidation price, or it will not protect you. ## Frequently asked questions ### What is a good risk/reward ratio? It depends on your win rate. Many traders aim for at least 1 : 2, which needs a win rate above one third just to break even before costs. A higher ratio helps only if the target is realistic. ### How do you calculate position size? Decide how much of your account you will lose if the stop is hit (account × risk %), then divide that amount by the distance between entry and stop. The result is the number of units to buy or sell. ### What win rate do I need to be profitable? At least 1 ÷ (1 + R), where R is your average reward divided by your average risk, and more once fees and slippage are included. At 1 : 2 that is 33.3%, at 1 : 1 it is 50%. ### Does leverage change risk/reward? No. The ratio comes from entry, stop and target. Leverage changes the margin required and the liquidation distance, so with high leverage a normal pullback can liquidate you before your stop is reached. ### How much should I risk per trade? There is no right number for everyone. Many risk guides suggest keeping it small, often around 1% of the account or less, so that a losing streak does not cause serious damage. This is general information, not advice.