Risk-reward ratio: setting take profit at 1R, 2R and 3R
Updated 13 October 2026
R is a trade’s risk measured by its own stop. Measure profit in R and it becomes clear what win rate a system needs and where to put the target.
What R and RR are
1R is the distance from entry to stop (and the amount you lose if the stop is hit). A 2R target is twice as far as the stop: with $100 at risk, the profit is $200. RR 1:2 says the same as a ratio.
How many trades must win
Break-even win rate = 1 ÷ (1 + RR)
Before spread and commission
| RR 1:1 | 50% |
|---|---|
| RR 1:2 | 33.3% |
| RR 1:3 | 25% |
The further the target, the less often it is reached — so the RR depends on style: scalping often works at 1:1–1:1.5, swing trading at 1:2 and beyond.
Expectancy
Expectancy per trade (in R) = win rate × RR − loss rate × 1
For example, 40% winners at RR 1:2: 0.4 × 2 − 0.6 × 1 = +0.2R per trade. With $100 at risk that averages +$20 a trade — before costs.
Partial profit taking
A popular scheme: close half at 1R, move the stop to breakeven and run the rest to 2–3R. It eases the pressure but changes the statistics: measure the result over the whole position. More in the partial close guide.
Setting the target fast
By hand: measure the stop distance, multiply by the RR and add it to the entry. In the TradeDeck panel the target is set from the RR automatically, and the take-profit line has 1R / 2R / 3R buttons — one press, and the profit shows in money and in R. The lot is sized from the risk — see how to calculate lot size.