R-Multiple
Computes the R-multiple of a long trade: the result expressed in multiples of the initial risk, (exit − entry) divided by (entry − stop). It's system traders' favorite unit of measure, popularized by Van Tharp, because it normalizes any trade by the risk it took — a 3R gain means profiting three times what was risked. Thinking in R, rather than in currency, keeps the focus on risk management. Enter the entry, stop and exit prices.
Result
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R-Multiple
Computes the R-multiple of a long trade: the result expressed in multiples of the initial risk, (exit − entry) divided by (entry − stop). It's system traders' favorite unit of measure, popularized by Van Tharp, because it normalizes any trade by the risk it took — a 3R gain means profiting three times what was risked. Thinking in R, rather than in currency, keeps the focus on risk management. Enter the entry, stop and exit prices.
Thinking in risk, not in money
Van Tharp popularized an idea that rewires a trader's mind: measure every result not in currency, but in multiples of the risk taken. The R-multiple does exactly that. You define the initial risk by the distance between entry and stop, and the trade's result is counted in how many times that risk you gained or lost.
The advantage is huge for evaluating a strategy. A profit of a thousand says nothing on its own, but a 3R gain says you profited three times what you risked, and that's comparable across trades of completely different sizes. A series of R-multiples reveals the system's real expectancy and keeps the focus where it matters: on risk management, not the size of the bet.
Enter the entry, stop and exit prices of a long trade. The tool computes the initial risk and returns the result in R. A negative R is a loss within expectations; losses larger than 1R mean the stop failed or was honored too late, an important signal to review execution.
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The results provided by this tool are for general informational and educational purposes only and do not constitute professional, financial, medical, legal, tax or accounting advice. Always confirm important decisions with a qualified professional and official sources.