# Understanding R-Multiple and Risk-to-Reward

> R-multiple is a professional way to measure your trade outcomes. Learn how to track your performance in terms of risk units.

**Tags:** r-multiple, risk-reward, trading-math, advanced
**URL:** https://traderjournal.app/advanced-statistics/understanding-r-multiple-and-risk-reward

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# Understanding R-Multiple and Risk-to-Reward

Many traders measure their results in pips or dollars. However, these metrics do not tell you how much risk you took to make that money. Making 1,000 dollars is not impressive if you risked 5,000 dollars to get it.

Professional traders use **R-multiples** to measure performance in terms of risk units.

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## What is an R-Multiple?

"R" represents the initial dollar risk on a trade (the distance between your entry price and stop loss, multiplied by your position size).

- If you risk 100 dollars on a trade, your **1R** is 100 dollars.
- If the trade hits your stop loss, you lose **-1R**.
- If the trade hits your take profit and you make 300 dollars, your win is **+3R**.

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## The Benefits of R-Multiple Tracking

Tracking your trades in R-multiples offers several advantages:

- **Consistency:** It helps you focus on risk rather than cash values.
- **Performance Normalization:** It allows you to compare trades on a small account with trades on a large account.
- **Expectancy Clarity:** If your average win is +2R and your average loss is -1R, your strategy is highly profitable, even with a 40% win rate.

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## Logging R-Multiples in Your Journal

To track this, calculate your initial risk for every trade. Note the R-multiple outcome at exit. Over time, your journal will show you if you are consistently achieving positive R-multiple outcomes.

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Trader Journal for MT4 and MT5 calculates your risk-to-reward ratios and outcomes automatically, showing your results in terms of risk units.

Download it today at android.traderjournal.app or ios.traderjournal.app.