R-multiples explained: judge every trade by the risk you took
Money is a poor way to compare trades. The same $200 profit can be excellent or reckless depending on how much you put at risk to get it. R-multiples fix this by measuring every result against the risk you took.
What is 1R?
1R is the amount you stand to lose if the trade hits your stop loss. Buy at 1.1000 with a stop at 1.0950 and 1 lot, and 1R is whatever those 50 pips cost you — say $500.
Calculating the R-multiple
R-multiple = result of the trade ÷ initial risk (1R)
- Won $1,000 with $500 at risk: +2R.
- Lost $500 at the stop: −1R.
- Lost $750 because you slipped or moved the stop: −1.5R — a sign something went wrong.
- Closed early for $150: +0.3R.
Why it matters
Once every trade is in R, results become comparable across position sizes, instruments and accounts. You can see that a setup with a 40% win rate is excellent because its winners average +2.5R, or that a 70% win rate is a problem because the losers average −3R.
Expectancy
Expectancy is your average R per trade. Add up the R of all trades and divide by the number of trades.
Expectancy = total R ÷ number of trades
Positive expectancy means that, on average, each trade has made you money relative to the risk taken. 0.3R over 100 trades is 30R; at 1% risk per trade that is roughly 30% before compounding. Negative expectancy means more trades will not help — the setup, the execution or the risk management has to change.
Common mistakes
- Not recording the stop. Without it there is no 1R and no R-multiple.
- Using the moved stop instead of the original one. R measures the risk you accepted when you entered.
- Ignoring fees. Commission and swap are part of the result; a +1R trade can be +0.9R after costs.
- Judging a setup on a handful of trades. Look at at least 30 before drawing conclusions.
In Simple Trading Journal
When a trade has a stop loss — typed in, imported from a report or synced from MetaTrader 5 — its risk and R-multiple are calculated automatically, and your statistics show your average realised R next to your results in money.