What an R-Multiple Is
R-multiple (R) is how many times your initial risk did you make or lose on a trade.
R = Trade P&L ÷ Initial Risk
Initial Risk = Distance from entry to stop × Position size
Examples:
- Risk $100 per trade (1% of $10,000 account)
- Win $200: R = +2R
- Win $50: R = +0.5R
- Loss $100 (stop hit): R = −1R
- Loss $200 (stop moved): R = −2R
Why R-Multiples Are Better Than Dollar P&L
Dollar P&L looks different depending on your account size and position sizing. R-multiples normalize performance:
- A $500 win on a trade where you risked $250 = +2R (good)
- A $500 win on a trade where you risked $500 = +1R (average)
- A $500 win on a trade where you risked $1,000 = +0.5R (poor, despite the dollar amount)
R-multiples reveal execution quality independently of account size.
Analyzing Your R-Multiple Distribution
In Tradapt's Analytics, view your R-multiple histogram to see the distribution of your trade outcomes.
Healthy distribution:
- Most losses cluster around −0.8R to −1.2R (stops being followed correctly)
- Winners spread between +1R and +3R
- Some outlier large winners (+4R+)
Unhealthy patterns:
- Large negative tails (−2R, −3R, −4R): Stops being moved or ignored
- Winners capping at +0.8R: Premature exits; not letting winners run
- Many small wins and occasional large losses: Risk management reversal (risky)
Using R-Multiples to Set Targets
If your setup historically produces an average winning R-multiple of +2.3R, set your targets at levels that require 2–2.5R to reach.
This aligns your target placement with your historical execution — rather than placing arbitrary targets based on "looks about right."
How to find your average winner R-multiple:
Filter your historical trades by setup, then look at the average R-multiple of your winning trades. This is your empirical target benchmark for that setup.