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For every reward-to-risk ratio there is a win rate below which you lose money and above which you make it. At 1:1 it is 50%. At 1:2 it is 33.3%. At 1:3 it is 25% — you can be wrong three times out of four and still be flat.
This is the arithmetic behind a claim that sounds wrong the first time you hear it: a 40% win rate at 3:1 comfortably beats a 70% win rate where losses are bigger than wins. Worked through in full here.
The ratio this calculator gives you is the one you planned at entry. The one that decides your results is the realised ratio — your actual average win divided by your actual average loss, across every trade you took, including the ones you exited early and the ones where the stop slipped.
The gap between the two is usually large. A plan of 3:1 that realises at 1.2:1 needs a 45% win rate rather than 25%, and you will not discover that from the chart you drew at entry. Only a record of completed trades shows it.
A fixed target caps every trade at the same multiple no matter what the market offers, which in a strong trend means selling your best position on schedule. Many swing traders use the ratio as a filter at entry — is this setup worth taking at all? — and then exit on a trailing rule rather than at the number. The exit options, and what each costs.
TradePiko does this on every trade you have actually taken — automatically, from your broker.