R-Multiple
A trade’s result expressed as a multiple of the amount you originally risked.
Also called: r multiple · in r · measured in r
In plain language
One R is your initial risk on a trade. If you risked $100 and made $300, the trade returned 3R. If you were stopped out, it was −1R.
This strips out account size and position size, so trades of wildly different dollar values become directly comparable. A month becomes a sequence like +2R, −1R, −1R, +4R.
Thinking in R also removes emotional weight from the numbers. A $1,400 loss is frightening; a −1R result on a plan that expects them is routine.
The formula
R-Multiple
Trade Profit or Loss ÷ Initial Risk
- Initial Risk
- Position size × distance from entry to original stop
Change the numbers
This is the concept as a working tool. Edit any field and watch what moves — that relationship is the thing worth remembering.
- R-Multiple
- 3R
- One R
- $100
- Result
- $300
Your initial risk on the trade
Measuring in R makes trades of any size comparable. A month reads as a sequence — +2R, −1R, −1R, +4R — instead of a list of unrelated dollar amounts.
Why it matters
R-multiples let you evaluate a strategy over hundreds of trades without account growth distorting the picture, and they make expectancy calculable.
Common mistakes
- Recalculating R from a moved stop instead of the original one.
- Reporting R while quietly varying risk per trade, which makes the numbers meaningless.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
The fixed share of your account you are willing to lose on any single trade.
The average amount you expect to win or lose per trade over a large sample.
The percentage of your trades that close at a profit.
A record of every trade, including the reasoning behind it and the result.
How much you stand to gain compared with how much you stand to lose on a trade.