Formula
R-multiple = net P/L / initial risk
RiskR
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R-Multiple
R-multiple expresses profit or loss in units of initial risk so performance is comparable across trades.
Worked example
Initial risk is 400 USD.
If net profit is 1,000 USD, the outcome is +2.5R.
If net loss is 200 USD, the outcome is -0.5R.
FAQ
Why track R instead of only currency?
R normalizes results by risk size, making it easier to compare trade quality over time.
Can R be used without a target price?
Yes for realized trades, but planning R ahead of entry needs a defined exit or target assumption.
Apply this in the calculator
Use this concept in a synthetic setup, then validate risk, reward, and R-multiple before placing a trade.
Open calculatorEducational content only. Not financial advice.