Is this trade worth taking?
WORKFLOW · RISK/REWARD · ADVANCED
Most traders check the price. Few check the math. Enter your setup to see R:R ratio, minimum win rate, position size, and liquidation distance instantly.
Losing half your trades at this ratio still leaves you ahead. The math works in your favour.
Add account size and leverage to see position sizing, liquidation price, and P&L.
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This risk/reward verdict is available as a deterministic call, workflow.run_risk_reward: useful for bots or AI agents that need the ratio, position size and break-even win rate for a setup.
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What assumptions and edge cases does this calculator use?
Entry, stop, target, account balance and leverage must be above zero, and the risk percent above 0 and at most 100. Fees are fractions from 0 to 0.05 (defaults 0.0002 and 0.0005). The maintenance margin rate is a fraction from 0 to 0.2 (0.005 is 0.5 percent). Stop and target distances are taken as absolute values from the entry, so a stop or target on the wrong side for a long or short is not rejected; check the side yourself. Not covered: funding, slippage, partial fills, exchange tiered margin and any guarantee that a stop fills at its price.
What is the R:R ratio and why does it matter?
Risk/Reward ratio is how much you stand to gain for every dollar you risk. A 3:1 ratio means a $300 potential gain on a $100 risk. Most systematic traders require at least 2:1 before entering. Below that, you need a very high win rate just to break even.
How is position size calculated?
Position size = (account balance × risk %) ÷ |entry − stop-loss|. This ensures that if your stop is hit, you lose exactly your risk budget, no more. The calculation is independent of leverage.
What does the verdict mean?
Strong (≥3:1): excellent setup, reward clearly justifies the risk. Good (≥2:1): solid, acceptable for most strategies. Marginal (≥1.5:1): borderline, consider tightening the stop or widening the target. Poor (<1.5:1): the reward does not justify the risk at current levels.
What is liquidation distance?
How far price must move from your entry before the exchange force-closes your position. A wider distance means more buffer. It depends on leverage and the exchange maintenance margin rate (MMR). Lower leverage = wider liquidation distance.