Risk and Reward Forex Calculator
The Risk and Reward Calculator uses 3 reference price points to calculate key retracement levels, target levels, and the corresponding risk-reward ratio, helping you quickly assess potential profit and loss before entering a trade.
Item
Price Level
Risk
Reward
Risk-Reward Ratio
0.382 and 0.618 are reference retracement levels; the risk, reward, and risk-reward ratio for target levels will be displayed automatically based on the current calculation logic.
0.382 retracement
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–
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0.618 retracement
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–
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1st target
2nd target
3rd target
How are risk and reward calculated?
The Risk and Reward Calculator is usually based on 3
reference price points. The system first calculates key
retracement levels from Price A and Price B, then
derives target levels based on Price C, and uses them to
estimate the corresponding risk, reward, and risk-reward
ratio.
Assume Price A is 1.3345, Price B is 1.3305, and Price C is 1.3205.
Step 1: Calculate the price range between A and B;
Price range = A − B;
1.3345 − 1.3305 = 0.0040
Step 2: Calculate key retracement levels
0.382 retracement = B + (Price range × 0.382)
1.3305 + (0.0040 × 0.382) ≈ 1.3320
0.618 retracement = B + (Price range × 0.618)
1.3305 + (0.0040 × 0.618) ≈ 1.3330
Step 3: Derive target levels from Price C
Target 1 ≈ 1.3180
Target 2 ≈ 1.3165
Target 3 ≈ 1.3140
Step 4: Calculate risk, reward, and risk-reward ratio;
Based on the current calculation logic, the system will automatically estimate the risk, reward, and risk-reward ratio for each target level. For example, in this case, Target 1 corresponds to a risk of about 0.0009, a reward of about 0.0140, and a risk-reward ratio of about 14.83.
Assume Price A is 1.3345, Price B is 1.3305, and Price C is 1.3205.
Step 1: Calculate the price range between A and B;
Price range = A − B;
1.3345 − 1.3305 = 0.0040
Step 2: Calculate key retracement levels
0.382 retracement = B + (Price range × 0.382)
1.3305 + (0.0040 × 0.382) ≈ 1.3320
0.618 retracement = B + (Price range × 0.618)
1.3305 + (0.0040 × 0.618) ≈ 1.3330
Step 3: Derive target levels from Price C
Target 1 ≈ 1.3180
Target 2 ≈ 1.3165
Target 3 ≈ 1.3140
Step 4: Calculate risk, reward, and risk-reward ratio;
Based on the current calculation logic, the system will automatically estimate the risk, reward, and risk-reward ratio for each target level. For example, in this case, Target 1 corresponds to a risk of about 0.0009, a reward of about 0.0140, and a risk-reward ratio of about 14.83.
The risk-reward ratio is for reference only and there
is no single fixed standard. In general:
- Below 1: Potential reward is lower than the risk, so careful evaluation is needed
- 1 to 1.5: A basic range that should be judged together with the strategy win rate
- 1.5 to 3: More common and easier for most investors to understand and accept
- Above 3: More attractive from a numerical perspective, but you should also be aware that the target may be too far away and harder to achieve in real trading
Conclusion: By entering the three reference price
points A, B, and C, you can quickly view key
retracement levels, target levels, and the
corresponding risk-reward ratio, helping you assess
whether the trade offers a suitable profit-loss setup.
0.382 and 0.618 are reference retracement levels; the risk, reward, and risk-reward ratio for target levels will be displayed automatically based on the current calculation logic.
0.382 and 0.618 are reference retracement levels; the risk, reward, and risk-reward ratio for target levels will be displayed automatically based on the current calculation logic.
