Step by step
How to read it
- 1The entry.
- 2The stop. Its distance is the risk — 1R.
- 3The target, measured in R. Here 40 pips ÷ 20 pips = 2R.
Watch out
Common mistake
Moving the stop further away to “give it room”. It changes R — and the size you should have traded.
Hypothetical numbers
Worked example
- Entry 1.0850 · stop 1.0830 → risk 20 pips = 1R.
- Target 1.0890 → reward 40 pips = 2R.
In one line
Definition
The distance to the target divided by the distance to the stop. 1R is the risk of one trade.
Check yourself
Check yourself
Stop 30 pips away, target 60 pips away. What is the reward to risk?