The formula
Risk/reward ratioExcelGoogle Sheets
=ABS(B3-B1)/ABS(B1-B2)In D1 → 3.00
R-multiple of the closed tradeExcelGoogle Sheets
=(B4-B1)/(B1-B2)In D2 → 2.00
Break-even win rateExcelGoogle Sheets
=1/(1+D1)In D3 → 25%
✓ Tested. All 3 Excel results in this example were recalculated in LibreOffice Calc 25.2 and matched the values shown.
Worked example
Paste the data below into a blank sheet starting at cell A1 (or download the cheat sheet, where every example is set up). Highlighted cells hold the formulas and show the expected results.
| A | B | C | D | |
|---|---|---|---|---|
| 1 | Entry | 50 | 3.00 | |
| 2 | Stop | 47.5 | 2.00 | |
| 3 | Target | 57.5 | 25% | |
| 4 | Exit | 55 |
How it works
- ABS(B3-B1)
- Reward per unit.
- ABS(B1-B2)
- Risk per unit.
- (B4-B1)/(B1-B2)
- Works for longs and shorts: for a short, both the numerator and denominator flip sign.
- 1/(1+RR)
- The minimum win rate to break even at that ratio, before fees.
Common errors and fixes
Why does the formula return #DIV/0!?
Stop equals entry.
Negative ratio?
Use ABS, or the stop is on the wrong side of entry.
Does this work in Google Sheets?
Yes. The formulas on this page work the same way in Google Sheets.