What Is an R-Multiple in Trading?

An R-multiple expresses a trade's profit or loss as a multiple of its initial risk (R), the distance from entry to stop loss.

Formula

R-multiple = (Exit − Entry) ÷ (Entry − Stop)

Example

You buy at 100 with a stop at 98, so 1R is 2 points. Exiting at 105 is a 5-point gain, or +2.5R. Hitting your stop is −1R.

Why traders use R

R makes trades comparable across markets, position sizes and account balances. The average of your R-multiples is your expectancy in R.

Try the R-multiple calculator. Related: expectancy, risk-to-reward ratio, position sizing. See the trading glossary.