An R-multiple describes the result of a trade in units of the risk you took on it. R is the amount you stood to lose if your stop was hit: your initial risk. If you risked £100 and made £250, that trade was +2.5R. Lose the full stop and it is −1R. Expressing every result this way strips out lot size and account size, so a trade on a £1,000 account and a trade on a £100,000 account can be compared on the same scale.
What it is
R stands for risk: the money between your entry and your stop-loss, in account currency, at the size you traded. Once you know R for a trade, every outcome becomes a multiple of it. A winner that made three times your risk is +3R. A loser that hit the full stop is −1R. A trade you closed early for half the intended loss is −0.5R.
The point is normalisation. Raw profit in pounds mixes together how good the trade was with how big you traded. R-multiples remove the size and leave only the quality of the outcome relative to what you put at risk. Fifty trades of wildly different sizes become fifty comparable numbers.
How it works
R-multiple = trade profit or loss ÷ initial risk (1R)
Set your risk before the trade: the distance from entry to stop, multiplied by your position size and pip value. That figure is 1R. When the trade closes, divide its actual result by 1R. A £600 profit on £200 of risk is +3R. A £90 loss on £200 of risk is −0.45R. A trade stopped for slightly more than planned, say £230 on £200 of risk, is −1.15R, and the fact that it exceeds −1R is itself worth noticing, because it means slippage or a gap cost you more than the stop promised.
A worked example
You risk £100 per trade, so 1R = £100, and you take ten trades:
- Three winners at +2R, +3R and +1.5R.
- Two small winners at +0.5R each.
- Four full losers at −1R each.
- One trade stopped beyond plan at −1.3R.
Add them up: (2 + 3 + 1.5 + 0.5 + 0.5) − (1 + 1 + 1 + 1 + 1.3) = 7.5R − 5.3R = +2.2R. Across ten trades you netted +2.2R, or £220 on £100 of risk per trade. Expectancy is 2.2R ÷ 10 = +0.22R per trade: on average, every trade you take is worth about £22. That single number now tells you what to expect from the next hundred trades, at whatever size you run them.
Why it matters
Two things fall out of R-multiples for free. The first is expectancy, the average R per trade, which is the cleanest measure of whether a strategy makes money and how much. The second is comparability. A trend EA that risks 2% and a scalper that risks 0.3% cannot be judged side by side in pounds, but in R they can: whichever earns more R per trade, weighed against how many trades it takes, is the better engine.
R also disciplines position sizing. Once results are in R you can change your risk per trade, halve it or double it, without rewriting your track record. The R numbers stay the same; only the pound value of 1R moves.
Common misconceptions
- R is your profit target. No. R is your risk, the downside. Targets are then measured in R, such as a 2R target, but R itself is defined by the stop, not the goal.
- A high average R means a good win rate. It does not. A strategy can average +0.4R while losing 60% of its trades, if the winners are large. R and win rate are independent.
- R only works with a hard stop. You need a defined risk, but it can be a mental stop or a maximum loss you enforce. What you cannot do is trade with no risk ceiling and expect R to mean anything.
- Any two R figures compare directly. Expectancy per trade must be weighed against trade count. +0.5R over 20 trades a year is not the same business as +0.2R over 500.
The Karnek note
Karnek reads each order's stop-loss straight from your live terminal, so it knows the risk you set and can score every result in R on the same trades and window as your other figures. The R numbers and the pounds beside them reconcile. It is read-only and can never place, close or modify a trade.
Written and reviewed by the Karnek Research team. Last updated August 2026.
Educational content only - not financial advice. Past performance does not predict future results. Trading carries significant risk.