R-MultipleR
An R-multiple expresses a trade's result in units of its initial risk: if you risked $100 and made $250, the trade returned 2.5R.
Dollar results are hard to compare: a $500 gain is great on a $100 risk and poor on a $2,000 one. R-multiples fix that by measuring every result against the amount you risked. One R is the loss you would take if the stop were hit; a trade that makes three times that is +3R. Thinking in R makes trades of different sizes comparable, turns your journal into clean statistics, and keeps attention on the thing you control — risk. This entry explains how to calculate and use R.
- Category
- Risk Management
- Reading time
- 4 min
- Also called
- R multiple, Risk multiple, Results in R
- Updated
R-multiples in plain words
R is your initial risk: entry price minus stop price, times position size.1 If you risk $200 on a trade, then 1R = $200.
Your result in R is profit or loss divided by that risk.2 Make $500 → +2.5R. Lose the full $200 → −1R. Lose $260 because of a gap → −1.3R. See Risk per Trade.
How to work in R, step by step
Define 1R before entering
1R = (entry − stop) × shares for a long; (stop − entry) × shares for a short. See Stop Loss.
Record the result in money
After costs, the actual profit or loss.
Divide by 1R
R-multiple = result ÷ initial risk.
Collect the distribution
Over many trades, your R-multiples show the shape of your results.
Calculate expectancy in R
The average R-multiple is your expectancy per trade. See Expectancy.
Plan in R
Targets such as “2R” and limits such as “stop for the day at −3R” work at any account size.
Worked examples
Example 1 — Calculating R
+3RBuy 150 shares at $40, stop $38.40. Sell at $44.80.
| 1R | 150 × $1.60 = $240 |
| Profit | 150 × $4.80 = $720 |
| R-multiple | $720 ÷ $240 = +3R |
The trade made three times what it risked.
Example 2 — Comparing two trades
ComparisonTrade A risked $100 and made $300. Trade B risked $1,000 and made $800.
| Trade A | +3.0R |
| Trade B | +0.8R |
B made more money, but A was the better trade relative to its risk.
Example 3 — A month in R
MonthTwelve trades: +2, −1, −1, +3.5, −1, +0.5, −1, −1.2, +2.4, −1, −1, +1.8 R.
| Sum | +3.0R |
| Average (expectancy) | +0.25R per trade |
| At $200 per R | +$600 |
Seven losers and five winners, still positive — because the average winner was about twice the size of the average loser.
Try it: your expectancy in R
Enter your win rate, average win and average loss. If you use R-multiples (for example average win 2, average loss 1), the result is your expectancy in R. It runs in your browser.
| Break-even win rate at 1:2 | 33.3% |
| Expectancy per trade | +0.20R (+$20.00) |
| Expected result over 100 trades | +$2,000.00 |
On average this combination makes money — if the win rate and ratio are real, measured over many trades.
Before commissions, spreads and slippage, which lower the real result. Actual sequences of wins and losses vary widely.
Results in dollars vs. results in R
| Aspect | Dollars | R-multiples |
|---|---|---|
| Comparable across sizes | No | Yes |
| Comparable across account sizes | No | Yes |
| Shows discipline problems | Rarely | Yes — losses worse than −1R stand out |
| Needed for tax and accounting | Yes | No |
Why traders use R
Clean statistics
Win rate, average R and expectancy become comparable across trades. See Win Rate.
Spotting rule breaks
Losses beyond −1R show stops that were moved or gapped.
Planning
Targets and limits in R scale automatically with the account. See Daily and Weekly Loss Limits.
Journaling
Recording every trade in R is the backbone of a useful journal. See Trading Journal.
Advantages and disadvantages
Advantages
- Makes all trades comparable.
- Keeps attention on risk.
- Turns a journal into usable statistics.
Disadvantages
- Requires a defined stop on every trade.
- Hides the absolute size of wins and losses.
- Trades without a stop cannot be measured honestly.
- Changing stops after entry muddies the calculation.
Going deeper
Read as far as you need. Each level builds on the one before it.
No stop, no R
Beginner
If you enter without a stop, there is no initial risk to measure against. Defining the stop first is what makes R work.
Losses bigger than −1R
Intermediate
The R distribution
Advanced
Plotting all trades by R-multiple shows the shape of a strategy: trend-following systems have many −1R trades and a few large winners; mean-reversion systems more small winners and fewer, larger losers. See Trend Following and Mean Reversion.
Common mistakes
Defining R after the trade
1R must be fixed at entry.
Moving the stop and recalculating R
Use the original stop for the R calculation.
Ignoring costs
Calculate R on results after fees.
Mixing R and percentages
R is relative to the trade’s risk, not to the account.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- 1R is the initial risk: stop distance × position size.
- R-multiple = result ÷ 1R.
- Average R is your expectancy per trade.
- R makes trades of any size comparable.
- Losses worse than −1R reveal slippage, gaps or rule breaks.
Frequently asked questions
What does 2R mean?
Is R the same as the risk-reward ratio?
Should every loss be exactly −1R?
Further learning
- Expectancy
The average of your R-multiples.
- Risk per Trade
How 1R is chosen.
- Trading Journal
Where R-multiples are recorded.
- Profit Factor
Another way to summarise results.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- CME Group. Proper Position Size (opens in a new tab) Checked .
- CME Group. The Mathematics of Trading Success (opens in a new tab) Checked .
Read more elsewhere
- Trading Metrics (our sister site): R-Multiple (opens in a new tab)
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.