R-Multiple — Measuring Every Trade in Risk Units

What is an R-Multiple?

R stands for Risk — specifically, the dollar amount you risked on a trade (the distance from your entry to your stop loss, multiplied by your position size).

An R-multiple expresses the outcome of a trade as a multiple of that risk.

• You risk $200. Trade makes $400. That's +2R
• You risk $200. Trade loses $200 (full stop hit). That's -1R
• You risk $200. Trade loses $60 (stopped out early). That's -0.3R
• You risk $200. Trade makes $1,000. That's +5R

Why R-Multiples Are Better Than Dollar P&L

Dollar P&L is noisy. A $500 winner from a $50,000 account is a completely different result than a $500 winner from a $5,000 account.

R-multiples normalize everything. Regardless of your account size or position size, a +2R trade means "I made double what I risked." This lets you:

• Compare performance across different account sizes
• Compare your trading now to your trading a year ago fairly
• Evaluate whether you're making enough on your winners to justify your losses

The Minimum R:R You Should Trade

Here's the uncomfortable math: if you're risking 1R to make 1R (1:1 risk/reward), you need a win rate above 50% just to break even — and above ~55% to profit after commissions.

Most experienced traders target a minimum of 1:2 R:R on their trades (risk 1R, target 2R). This means you only need a 35% win rate to be profitable.

Rule of thumb: Never take a trade where your potential reward is less than your potential risk. This is one of the most important risk management principles.

Tracking R-Multiples in Tradapt

When you log a trade with an entry price, exit price, stop loss, and position size, Tradapt automatically calculates the R-multiple.

You can view:

• Average R — Your mean R across all trades (should be positive)
• Best R — Your biggest single trade win
• Worst R — Your biggest single loss (should ideally be close to -1R)
• R distribution chart — A histogram showing the spread of your outcomes

The R distribution chart is one of the most revealing analytics available. A healthy system has a positive tail (occasional large winners) and a tight left side (losses controlled near -1R).