Glossary

R Multiple

Every trade measured against what you risked, where a full stop is always minus 1R.

Last updated: 2026-07-28

An R multiple sizes every trade against the risk you put on it. Risk $100, make $250, and that trade is +2.5R. Get stopped at your full stop and it's -1R, every single time, whatever the dollar amount was. R turns a messy column of dollar results into one clean scale, so a $50 trade and a $5000 trade can finally be compared on the only thing that matters... how much you put at risk to make them.

How do you work out an R multiple?

Divide the result of the trade by what you risked. Risk 200 and make 600, that's +3R. Lose the whole 200, that's -1R. Your starting risk is the distance from your entry to your stop, times your position size. Lock that in as your 1R and every result reads as a multiple of it. A clean stop out always lands at -1R.

Why R instead of dollars?

Because dollars hide your edge behind your position size. A trader who made 1,000 dollars risking 2,000 did worse than one who made 800 risking 400, and only R shows it at a glance. R also travels across accounts. The same strategy on a $5000 account and a $500000 account draws the same R curve. Dollars tell you how you did. R tells you how good the strategy is, which is why your Edge Score runs on the R scale.

The one thing you must never do.

Never annualise them. There's no square root of 252 scaling for R, and slapping it on turns a real +40R year into some fantasy number in the thousands. R multiples aren't percentage returns and don't compound like them, so report Total R or expectancy per trade, never a made up annual figure.

Frequently asked questions

A trade expressed as a multiple of the risk you took. Risk one unit, make twice that, and it's +2R. A full stop out is always minus 1R, whatever the dollar figure.
Divide the trade result by what you risked. Risk 200 and make 600 is +3R, lose the 200 is minus 1R. Your 1R is the entry to stop distance times position size.
Dollars hide your edge behind position and account size. R puts every trade on the same risk based scale, so a small account and a big account running the same strategy draw the same R curve.
No. R isn't a percentage return, doesn't compound like one, and must never be scaled by the square root of 252. Report Total R or expectancy per trade instead.

References

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