risk-reward-ratio
Calculate and evaluate risk-reward ratios for NSE/BSE equity trades. Includes R:R calculation, minimum R:R tables by win rate, trade filtering rules, and multi-target R:R analysis. Use when the user asks: "risk reward for this trade", "is this trade worth it", "R:R ratio", "what's my risk vs reward", "should I take this trade", "expected value of trade", or any question about whether a trade setup justifies the risk.
How do I install this agent skill?
npx skills add https://github.com/bhala-srinivash/nse-trading-skills --skill risk-reward-ratioIs this agent skill safe to install?
- Gen Agent Trust Hubpass
The skill is a mathematical guide and educational resource for calculating risk-reward ratios in equity trading. It contains no executable code, external dependencies, or network operations and poses no security risks.
- Socketpass
No alerts
- Snykpass
Risk: LOW · No issues
What does this agent skill do?
Risk-Reward Ratio
If the math doesn't work, don't take the trade. R:R is the simplest filter that separates good setups from bad ones.
Prerequisites
No dependencies required. Pure math — provide entry, stop, and target prices. No data tools needed.
Calculation
Risk = Entry price - Stop-loss price
Reward = Target price - Entry price
R:R = Reward ÷ Risk
Example:
Entry: Rs.1,800
Stop: Rs.1,700 → Risk = Rs.100 per share
Target: Rs.2,100 → Reward = Rs.300 per share
R:R = 300 ÷ 100 = 3:1
In rupee terms:
Total risk = Risk per share × Number of shares
Total reward = Reward per share × Number of shares
Minimum R:R by Win Rate
Your win rate determines the minimum R:R needed to be profitable over time.
| Win Rate | Min R:R (Breakeven) | Recommended Min | Trades Needed to Recover 1 Loss |
|---|---|---|---|
| 30% | 2.33:1 | 3:1 | ~3 winners |
| 40% | 1.50:1 | 2:1 | ~2 winners |
| 50% | 1.00:1 | 1.5:1 | 1 winner |
| 60% | 0.67:1 | 1:1 | <1 winner |
| 70% | 0.43:1 | 0.75:1 | <1 winner |
If you don't know your win rate, assume 40-50% and require at least 2:1 R:R.
Trade Filtering Rules
| R:R Ratio | Decision |
|---|---|
| Below 1:1 | Skip — you're risking more than you can gain |
| 1:1 to 1.5:1 | Only if win rate > 55% AND high-conviction setup |
| 1.5:1 to 2:1 | Acceptable for experienced traders with edge |
| 2:1 to 3:1 | Good — standard for swing trades |
| 3:1+ | Excellent — take these trades consistently |
Multi-Target R:R
For trades with multiple profit targets (scaling out):
Target 1 (50% of position): Rs.1,900 → R:R = 1:1
Target 2 (30% of position): Rs.2,000 → R:R = 2:1
Target 3 (20% of position): Rs.2,200 → R:R = 4:1
Weighted R:R = (0.5 × 1) + (0.3 × 2) + (0.2 × 4) = 1.9:1
This is useful when you plan to scale out at different levels.
Expected Value
For a more complete picture, calculate expected value per trade:
EV = (Win rate × Average win) - (Loss rate × Average loss)
Example:
Win rate: 50%, Avg win: Rs.10,000, Avg loss: Rs.5,000
EV = (0.5 × 10,000) - (0.5 × 5,000) = Rs.2,500 per trade
Positive EV = edge. Negative EV = change your approach.
R:R Checklist
Before entering any trade:
- Have I identified a specific target (not just "it'll go up")?
- Is the stop-loss at a technically meaningful level?
- Is R:R at least 1.5:1 (ideally 2:1+)?
- Does the position size keep risk within 1-2% of capital?
- If this trade hits stop, will I still be fine psychologically and financially?
How can the creator link this skill?
Add the canonical catalog link to the repository README so users can inspect current installs and available audits. The publishing guide covers the complete discovery path.
<a href="https://skillzs.dev/skills/bhala-srinivash/nse-trading-skills/risk-reward-ratio">View risk-reward-ratio on skillZs</a>