R-Multiple: Measure Trades Against Initial Risk
Learn how R-multiple compares a trade result with initial planned risk, how to calculate it, and how to use R consistently in a trading journal.
By Kru Kook (Krittiya Khunabrimas)
What R means
R is the amount you planned to risk before opening a position. If your plan estimates a THB 1,000 loss at the stop, then 1R for that trade is THB 1,000. The R-multiple is the trade’s net result divided by its initial R.
R-multiple = net profit or loss ÷ initial planned risk
Define whether you use planned risk or actual exit risk. For system comparisons, apply the same definition consistently.
Worked examples
If initial planned risk is THB 1,000 and the net result is a THB 1,800 profit, the trade returned +1.8R. A net loss of THB 800 is −0.8R. A THB 1,000 loss is −1R.
Using net results includes costs actually incurred. If gross profit was THB 2,000 and costs were THB 200, use THB 1,800 in this example.
R-multiple versus planned risk-to-reward
Risk-to-reward is a plan made before entry—for example, risking THB 1,000 to target THB 2,000, or 1:2. R-multiple is the realized result after the trade ends. A trade might finish at +0.5R, −1R, or +2.3R.
Do not count a target that has not been reached as a realized R-multiple, and do not automatically record a loss larger than plan as −1R. Record the actual result.
Compare results using R
R helps compare trades with different capital amounts or stop distances. A +1.5R result from THB 500 of initial risk is THB 750; +1.5R from THB 5,000 is THB 7,500. The R return is the same, while the baht results differ substantially.
Track at least average R, median R, trade count, total R after costs, and results by setup or order type. Use these to calculate expectancy without ignoring costs or sample size.
Journal fields to keep
- Account value and initial risk used to define 1R
- Entry, stop, exit, and the reason for each decision
- Contract or unit count and actual costs
- Net result in baht and in R
- Differences between the plan and actual execution
If you move a stop after entry, retain the initial risk value and log the plan change separately so historical statistics do not look better than they were.