I hope you have already read our article on Risk Reward Ratio. If not, please find it here.
Many of our readers have requested for the excel sheet to calculate the profitability based on Risk Reward Ratio. You can find the excel sheet as an attachment with this post. And yes, we have not kept any formulas hidden in the excel sheet
The Excel sheet basically contain two worksheets outlined below:-
1) Risk Reward Ratio and Profitability:- This worksheet will calculate the profitability based on your risk-reward ratio. In this worksheet, you just have to enter the Risk and Reward values in column A and B respectively. We have kept Success Rate as 40 for all calculations, however this is editable and can be changed as per your strategy. Risk is the maximum amount you can lose in a trade(This might be equal to your stop loss value). While Reward is the Target Profit expected. Different strategies have different risk-reward ratio. Profit is calculated considering 100 trades, with Risk and Reward as input in designated columns.
We have already pre-filled excel sheet with some standard values, which can be edited as per requirement. Also, an Area graph is created based on the values in the table. Please see the below screen-shot.
2) Risk Reward Ratio vs Success Rate: This worksheet will calculate required Success Rate for the given Risk Reward Ratio, and vice versa. In this worksheet too, you have to enter the Risk and Reward values in column A and B respectively. Success Rate is calculated for a break-even trade (no profit no loss).
We have already pre-filled excel sheet with some standard values, which can be edited as per requirement. Also, a line graph is created based on the values in the table. Please see the below screen-shot.
Please note that we haven’t considered brokerage or any other charges while formulating this excel sheet.
Download the Excel sheet here. Post your queries in the comment section below.