"R" is short for risk: the amount you planned to lose if your stop got hit. Measuring every trade as a multiple of that risk is one of the simplest upgrades you can make to your journal.
How to calculate an R-multiple
R-multiple = profit or loss on the trade ÷ planned risk
| Planned risk | Result | R-multiple |
|---|---|---|
| $200 | +$500 | +2.5R |
| $200 | −$200 | −1R |
| $200 | +$60 | +0.3R |
| $200 | −$340 | −1.7R |
That last row is a red flag. A loss bigger than −1R means the stop was moved, ignored or skipped by slippage. Your journal should flag every one.
Why R beats dollars
- It's comparable. A +$500 trade on 1 contract and a +$5,000 trade on 10 contracts can both be +2R. R lets you compare trades whatever size you used.
- It survives account changes. Move from a $50K to a $150K account, or from MNQ to NQ, and your stats in R still mean the same thing.
- It exposes discipline problems. Losses should cluster at −1R. If they don't, your exits aren't following your plan.
- It removes the emotion. "−1R" stings less than "−$800", which makes honest review easier.
Get these numbers calculated for you
VOLERON works out expectancy, profit factor, win rate and drawdown for every setup and session, automatically.
Try VOLERON free for 7 daysExpectancy in R
Add up the R of all your trades for a setup and divide by the number of trades, and you get that setup's expectancy in R, the average you make per trade for each unit of risk.
Expectancy (R) = total R ÷ number of trades
Example: 40 trades totalling +14R gives an expectancy of +0.35R. At $200 risk per trade, that's about $70 per trade on average. Anything above zero over a decent sample is an edge. Full guide: trading expectancy explained.
What's a good average win in R?
It depends on your win rate. A 40% win rate needs average wins above 1.5R to make money. A 65% win rate can work with wins under 1R. That's why you look at win rate and R together. See win rate vs risk-reward.
Common R mistakes
- Not recording planned risk at entry. Work out R from the stop you planned, not the one you ended up with.
- Using account % instead of R. They're related but not the same. R is per trade, based on your stop.
- Ignoring fees. On small scalps, commission can take 0.1R or more per trade.