R-Multiple Calculator

What is an R-multiple?

R-multiple is the ratio of your trade's profit or loss to the amount you initially risked. Invented by Van Tharp in the 1980s and now the standard metric for professional traders, it turns every trade — whether on Apple stock or Micro E-mini Nasdaq — into a directly comparable number.

If you risked $200 on a trade and made $400, your R-multiple is +2.0R. If you lost $150 on the same setup, that's −0.75R. No matter the market, the instrument, or the dollar amounts, R-multiple normalizes every trade to one scale.

Why R-multiple matters more than P&L

• Comparable across instruments: a $500 win on MES futures and a $500 win on 5 AAPL shares look the same in dollars but very different in R. R strips out size noise.
• Evaluates the strategy, not the account size: you can test if a setup works using $100 of risk or $10,000 — the R-multiple is the same.
• Reveals asymmetry: a strategy with 50% win rate at +3R winners and −1R losers has a massive edge. Pure P&L hides this.
• Standard across trading literature: every serious trading book from Schwager to Brooks reports results in R. You'll read better once you think in R.

Expectancy: the final formula

Once you have R on every trade, calculate expectancy:

Expectancy = (Win rate × Avg winning R) − (Loss rate × Avg losing R)

A positive expectancy number means the strategy has a real edge. Most traders never calculate this because their journal doesn't track R. Journali does automatically.

Reference table — R outcomes at a glance

• +3R or more: home run. Setup worked perfectly.
• +1R to +2R: standard winner. Hit your first target.
• +0.5R: small win. Usually means you cut short or the move faded.
• 0R to −0.5R: scratch or small loss. Discipline exit before the full stop.
• −1R: full stop loss hit. Accept it, journal it, move on.
• Worse than −1R: you broke a risk rule. Slippage, held past stop, or sized up. Document what happened.