Before professionals ask “will this trade win?”, they ask a better question: “if it wins, how much do I make — and if it loses, how much do I lose?” That comparison is the risk/reward ratio, and the counting unit behind it is the R-multiple. Every statistic on TradingPal is measured this way, so ten minutes here makes every number on this site readable.
Live backtest numbers on this page updated Jul 2, 2026.
A risk/reward ratio compares what you're risking on a trade against what you stand to gain. Say you buy a stock at $100, decide in advance you'll get out if it falls to $95 (your safety exit, the “stop-loss”), and you're aiming for $110 (your “target”). You're risking $5 to try to make $10 — a risk/reward ratio of 1:2.
The magic isn't in the ratio itself — it's that you decided both numbers BEFORE putting money in. Most beginner losses come from trades that never had an exit plan: the stock falls, there's no pre-decided line, and a small loss quietly grows into a big one.
Every trade has exactly three prices that matter: where you get in, where you get out if you're wrong, and where you get out if you're right. The risk/reward ratio is just those three prices in one number.
No calculator needed — it's two subtractions and a division:
Entry price minus your safety-exit price. Buying at $100 with the exit at $95 → your risk is $5 per share. This is the most you should lose if you follow your plan.
Target price minus entry price. Target $110, entry $100 → your potential reward is $10 per share.
Reward ÷ risk. $10 ÷ $5 = 2, written as “1:2” — you're risking one dollar to try to make two. If the answer were 0.5, you'd be risking a dollar to make fifty cents, which needs a very high win rate to survive.
Traders got tired of saying “I made $412 on a $10,000 position with a $200 risk,” so they invented a cleaner unit: R. One R is simply the amount you risked on the trade — the distance from your entry to your safety exit. Everything else gets counted in that unit.
In the example above, your risk was $5 per share, so $5 = 1R. If the stock hits the $110 target, you made $10 — that's +2R. If it hits your safety exit, you lost $5 — that's −1R, and by design a planned loss is always about −1R, never −4R.
R makes trades comparable. A +2R trade on a $9 stock and a +2R trade on a $900 stock are the SAME quality of result, even though the dollar amounts differ wildly. That's why every win rate, average return, and trade history on TradingPal is measured in R — it's the honest unit.
One practical note: R only means something if the safety exit is real. Our backtests place it just past the last small dip before the breakout (the “swing low”) and every simulated trade lives or dies by it — the R numbers you see assume the plan was followed.
The honest answer: there is no magic number, because risk/reward and win rate are two ends of the same see-saw. A 1:1 ratio makes money if you win more than half the time. A 1:2 ratio makes money winning just 34% of the time. A 1:5 ratio can make money winning once in five — but setups that pay 5R are rare and miss often.
That's why “only take 1:3 trades or better,” the advice plastered across trading forums, quietly backfires: demanding huge targets means most trades die before reaching them, and the win rate collapses faster than the ratio compensates.
What actually matters is the COMBINATION — the average R across many trades after wins and losses cancel out (traders call it “expectancy”). A system that averages even +0.3R per trade, repeated hundreds of times with losses capped at −1R, compounds into a real edge. We wrote a whole guide on that math: win rate, profit factor and expectancy.
Every pattern setup our screener flags comes with all three prices pre-drawn: the entry at the pattern's boundary line, the safety exit just past the last small dip before the breakout (that distance is the trade's 1R), and a target projected from the pattern's own height (the “measured move”). For upward breakouts that keep running, our tested rule holds past the target while the price stays above its 10-day average.
And because we backtest those exact rules nightly across 500+ stocks, we can show you what the see-saw actually settles at — live, in R:
| Pattern | Usual break | Win rate | Avg return | Backtested trades | Fresh (45d) |
|---|---|---|---|---|---|
| Bull Pennant | Up | 55.2% | +0.58R | 13,034 | 80 |
| Bear Pennant | Down | 44.1% | +0.15R | 11,004 | 52 |
| Ascending Triangle | Up | 55.2% | +0.58R | 13,034 | 14 |
| Descending Triangle | Down | 44.1% | +0.15R | 11,004 | 6 |
| Symmetrical Triangle | Either way | 55.2% | +0.58R | 13,034 | 99 |
| Falling Wedge | Up | 53.9% | +0.38R | 13,048 | 84 |
| Rising Wedge | Down | 49.3% | +0.13R | 14,154 | 56 |
Historical results of a simulated strategy, refreshed nightly. Triangle rows show their usual break direction's family; each guide breaks out both directions.
R is the app's native language. The screener's left-rail track-record panel (the live component below) reports every family's average return in R; each setup tile shows the projected move to its target; and when you open a chart, the copilot marks the entry, safety exit, and target — the three prices this article is about — directly on the candles.
So when the app says a pattern averages +0.58R, you now know exactly what that means: across every tested trade, wins and losses included, it earned a bit more than half of whatever was risked — per trade, over and over.
Not a screenshot — this is the live panel from the screener, showing the current all-patterns backtest. It refreshes after every nightly scan.
Educational content, not investment advice. Backtest statistics are historical results of a simulated strategy, refreshed nightly — they describe the past, not the next trade.