R-multiples explained: measure every trade by the risk you took
What R is, how to calculate it, why it’s the fairest way to compare trades, setups and markets, and how to read your average R.
A $300 win sounds great. But was it a $300 win on a $100 risk, or on a $600 risk? Those are completely different trades. R-multiples fix this by measuring every result against the risk you took to get it.
What R is
R is your initial risk on a trade: the amount you'd lose if your stop were hit. If you enter MNQ at 20,000 with a stop at 19,990 on 2 contracts, your risk is 10 points × $2 × 2 = $40. That $40 is 1R for this trade.
| Result | In dollars (1R = $40) | In R |
|---|---|---|
| Stopped out | -$40 | -1R |
| Took profit at 2× risk | +$80 | +2R |
| Exited early | +$20 | +0.5R |
| Stop slipped, or moved | -$70 | -1.75R |
The formula: R-multiple = result ÷ initial risk. Losses bigger than -1R are a warning sign: slippage, a moved stop, or no stop at all. See stop moving your stop loss.
In R, a disciplined loser is always -1R. Anything worse is a rule you broke.
Why it’s the fairest comparison
- Across sizes: a +2R trade on 1 contract and a +2R trade on 5 contracts were executed equally well.
- Across markets: NQ and ES have different point values, but R puts them on the same scale.
- Across accounts: a 50K and a 150K account can be compared trade for trade.
Reading your average R
Add up the R of all your trades and divide by the number of trades. That's your expectancy in R. An average of +0.2R means that, on average, each trade earns a fifth of what you risk. Over 100 trades at $40 risk, that's about $800. If it's negative, no amount of size will fix it; see what good win rate and profit factor look like.
How to start using R
- Write your stop before every trade, so you know your risk in dollars. The position size calculator gives it to you.
- Note the initial risk in each trade's notes (for example “Risk $40”).
- At the end of the week, divide each result by its risk and look at the average and the worst ones.
Looking at results in points or ticks (with Market Matrix's Show amounts as switch) is a good step toward R, because it removes contract size. Next in this series: how to manage a trade after you're in.
This article is for education only and isn't financial advice. Trading futures involves substantial risk of loss.