An R-multiple describes a trade result in units of the amount you risked. "R" is the money you would lose if the stop were hit. If you risked $100 and made $250, the trade was +2.5R. If you lost $100, it was −1R.
On this page5 sections
Why measure in R
- It removes account size. A +2R trade means the same for a small or a large account.
- It ties results to the plan. A loss bigger than −1R shows the stop was ignored or price gapped.
- It shows your edge. Average R across many trades tells you whether the process works.
How to calculate it
1. Before entry: R = (entry − stop) × shares. 2. After exit: result = (exit − entry) × shares. 3. R-multiple = result ÷ R.
A worked example (hypothetical numbers)
Entry $50, stop $48, 50 shares. R = $2 × 50 = $100. The trade exits at $55: the result is $250, so +2.5R. A second trade with the same plan exits at the stop: −1R. A third gaps down and exits at $47.50: −1.25R, a reminder that gaps can exceed the plan.
Expectancy in one line
Average all your R-multiples. If ten trades total +6R, the average is +0.6R per trade. That number, over enough trades, matters far more than any single winner.
The habit to build
Record R before every entry and the R-multiple after every exit. The free trade journal template does this for you, and the risk reward calculator shows the planned R before you start.
Education only, not financial advice. Past results, in R or otherwise, do not guarantee future results.
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