What is R-multiple in trading?
R-multiple is how disciplined traders measure a trade: not in dollars or percent, but in units of risk. Your R is the amount you put at risk on the trade — the distance from your entry to your stop, multiplied by position size. The result is then expressed as a multiple of that R.
The formula
R-multiple = (exit − entry) × size ÷ initial risk = profit or loss ÷ R
A worked example
You buy at $50 with a stop at $48 — your risk is $2 per share. Buy 100 shares and your R = $200.
- • Exit at $54 → profit $400 → +2R
- • Exit at $51 → profit $100 → +0.5R
- • Stopped out at $48 → loss $200 → −1R
Why it matters
Because R normalizes every trade to the same scale, you can compare trades of any size and judge your whole strategy by its average R — which is exactly your expectancy. Think in R and you stop fixating on single dollar amounts and start managing a process.
Plan a trade's R before you take it:
Risk/reward calculatorFrequently asked questions
What does R mean in trading?
R is your initial risk on a trade — the distance from entry to stop, times position size, in dollars. Every result is then measured in multiples of that R: a trade that makes 2× your risk is +2R; one that hits your stop is −1R.
How do you calculate R-multiple?
R-multiple = profit or loss ÷ initial risk. If you risked $100 (entry-to-stop) and made $250, that's +2.5R. If you lost the full $100, that's −1R.
Why use R-multiple instead of dollars or percent?
It normalizes every trade to the same scale regardless of account size or position size, so you can compare a small and a large trade fairly and judge your strategy's edge by its average R (expectancy).
What is a good average R-multiple?
Any positive expectancy (average R above 0) is profitable over enough trades. Many consistent traders aim for an average around +0.2R to +0.5R per trade; the exact figure matters less than keeping it positive and stable.