What is R-Multiple?
A unit of measurement expressing trade outcomes in terms of initial risk — a +2R trade means you made twice your risk amount.
R-multiples (R stands for "Risk") are a universal way to measure trade outcomes regardless of account size or position size. A trade that returns 2× your initial risk is called a +2R trade. A trade that loses your full risk amount is −1R.
Why R-multiples matter:
They allow you to evaluate strategies and track performance without worrying about dollar amounts. A trader risking $100/trade and a trader risking $1,000/trade can compare strategies on equal footing using R.
Calculating R-multiple:
R = Trade P&L ÷ Initial Risk Amount
Examples:
Expected value in R:
EV = (Win Rate × Average Win R) − (Loss Rate × Average Loss R)
With 40% win rate, average win +3R, average loss −1R:
EV = (0.40 × 3) − (0.60 × 1) = 1.20 − 0.60 = **+0.6R per trade**
Positive EV means the strategy is profitable over a large sample. Track your trades in R-multiples to identify which setups are actually positive EV.