How risk/reward is calculated

Risk = |entry − stop-loss| and reward = |take-profit − entry|. The ratio is reward ÷ risk. Example: entry $50, stop $48, target $56 → risk $2, reward $6 → 1 : 3.

Win rate needed to break even = 1 ÷ (1 + ratio). With 1 : 3 you break even if 25% of such trades reach the target — before fees. The calculator works for long trades (stop below entry) and short trades (stop above entry).