Entry, stop, target — the R:R ratio tells you whether the math is on your side before you risk a dollar.
Risk : Reward
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Dollars at risk
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Potential reward
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% to stop
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% to target
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Breakeven win rate
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Risk vs reward
Risk ($ at stop)Reward ($ at target)
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Educational tool only — not financial advice. Assumes your stop fills at the stop price; gaps and slippage can make real losses larger. A good ratio doesn't make a bad setup good — the levels still have to make sense.
The R:R rule (30-second version)
Never take less than 1:2. Risk $1 to make $2. At 1:2 you can be wrong 6 times out of 10 and still break even.
The ratio decides the size. Know your dollars at risk first — then size the position so a stop-out stings, not kills.
Targets need a reason. A 1:5 ratio means nothing if the target is at a price the stock has never touched. Levels first, ratio second.