R-multiple in trading: what it is and how to use it
R is the amount you planned to risk on a trade. An R-multiple is your result measured in those units: a +2R trade made twice what you risked, a −1R trade lost what you planned. It sounds like a small thing. It changes how you judge your trading.
The short version
R-multiple = trade result ÷ initial risk. It lets you compare trades regardless of size, spot losses bigger than planned (anything worse than −1R), and work out expectancy in a way that doesn't change when you size up or down.
- You always trade exactly the same size
- You only care about the account total this week
- Your size changes from trade to trade or month to month
- You want to see losses that went past your stop
- You want to compare setups fairly
- You're building towards consistent position sizing
How to calculate an R-multiple
Initial risk is the distance from entry to your stop, times your size, in dollars. That's 1R. Example: long 2 MES at 5,800 with a stop at 5,790. That's 10 points × $5 × 2 = $100, so 1R = $100. Exit at 5,825 for +$250: that trade was +2.5R.
Why R beats dollars
- Size stops distorting your results. A +$400 day on 4 contracts and a +$100 day on 1 contract can be the same trading.
- Losses past your stop jump out. A −1.8R loss means the stop wasn't respected, or wasn't there.
- Expectancy stays comparable. 0.25R per trade means the same thing on a $5,000 account and a $500,000 one.
- It forces you to define risk before the trade, which is half of good risk management.
How to read your R
Your losers should cluster around −1R. If lots of them sit at −1.5R or worse, the problem isn't your setup, it's that stops get moved or ignored. Your winners tell you whether you let trades work: if your plan targets 2R and your average winner is 0.8R, you're cutting them early.
Add up your R per trade over 50 trades and divide by 50, and you have your expectancy in R. For sizing, the position size calculator turns your 1R into contracts.
Tracking R without a spreadsheet
In Actal you set what 1R is for each account and write your risk rules in R, like "max loss per trade 1R" or "daily loss limit 3R". Every trade you import is checked against them, so a loss that ran past 1R shows up as a broken rule with what it cost. Free while in beta.
Who wrote this
I'm Joakim. I trade index futures full time and coach traders one-on-one at Jusell Trading Academy. Every student I coach measures in R by the second week.
Questions people ask
Drop in one export. In a minute Actal grades the trades it can, prices the mistakes you tagged, and tells you the first thing to fix. Free during beta, no card.
Full-time index futures trader. Coaches traders one-on-one at Jusell Trading Academy, five students at a time, since 2020. No platform was built for developing traders, so he had his own coaching software built; old students loved it and kept coming back, and Actal is that software turned into a proper journal for what matters.