Definition, as the journal computes it
1R is the loss at the initial stop: what the whole position as entered would have lost, before costs, had it exited at the stop.
R = the trade’s net P&L ÷ 1R. R uses net P&L, after commission, swap and fees, so it matches the money you actually made or lost: a trade stopped out exactly at its stop, with commission, is a little worse than −1R, and a trade that is positive gross but zero net is 0R. Each trade’s R is exact.
- Average R = total R ÷ the number of trades with an R. Working: “Sum of R ÷ trades with an initial stop = 18.40R ÷ 30 ≈ 0.6133R → +0.61R. 8 trades have no stop and aren’t counted.”
- With no trade having an R, total and average are unavailable (
null).
From the journal's written definitions: R-multiple
On this page
What is an R-multiple?
An R-multiple measures a trade’s result in units of what it risked: its net P&L divided by 1R, the loss it would have taken at its initial stop. A trade that risked $100.00 and made $146.00 after costs is +1.46R.
Because every trade is measured against its own risk, a 0.10-lot trade and a 2-lot trade can be compared directly. +2R is the same result on both: twice what was risked.
How is 1R set?
1R is what the whole position as entered would have lost, before costs, had it exited at the initial stop. On 0.50 lots of EUR/USD bought at 1.08500 with a stop at 1.08300, that is 0.00200 × 50,000 = $100.00.
- Units0.50 lots × 100,000= 50,000 EUR
- Distance to the stop1.08500 − 1.08300= 0.00200
- 1R0.00200 × 50,000= $100.00
With several entries, the journal uses all of them, at their average price weighted by size, for their total size. It works 1R out exactly the way it works out an exit’s P&L, so currencies convert the same way: for USD/JPY in a USD account the stop price is the rate, and for a pair like EUR/GBP in a USD account it needs the rate at entry.
How do you calculate R?
R = the trade’s net P&L ÷ 1R. Using net P&L, after commission, swap and fees, means R matches the money you actually made or lost.
- Trade A:EUR/USD, 1R $100.00, closed for a net +$146.00, so +1.46R.
- Trade B:EUR/USD, 1R $100.00, stopped out at its stop with $4.00 of costs, net −$104.00, so −1.04R.
- Trade C:no initial stop recorded, so it has no R.
- Trade D:MNQ, 2 contracts, stop 80 ticks away at $0.50 a tick, so 1R is $80.00; net +$116.00, so +1.45R.
Each trade’s R is kept exact, and shown to 2 decimals. You can work out any of these with the profit calculator by adding a stop.
Why is a stopped-out trade worse than −1R?
Because 1R is the loss at the stop before costs, and R uses the result after costs. A trade stopped out exactly at its stop that paid $4.00 in costs nets −$104.00 on a 1R of $100.00, which is −1.04R.
The same rule works the other way: a trade that is positive before costs but exactly zero after them is 0R, not a small win.
What are total R and average R?
Total R is the sum of R over every trade that has one, and average R is that total divided by how many trades have one. For trades A, B and D on this page, the total is +1.87R and the average is about +0.62R.
- Total R1.46R − 1.04R + 1.45R= 1.87R
- Average R1.87R ÷ 3 is about 0.6233R rounded to 0.62R
Trade C has no R, so it’s left out of both, and the journal says so under the figure: “1 trade has no usable stop and isn’t counted.” Average R is also called expectancy in R; see expectancy.
Which trades have no R?
A closed trade has no R when it has no initial stop, when the stop is at the entry so 1R is zero, or when exiting at the stop would have made money. It also has no R when the loss at the stop is in another currency and no rate at entry was recorded, because the journal never guesses a rate.
- No stop:no initial stop was recorded.
- Stop at the entry:1R would be zero, and nothing can be divided by it.
- Stop on the wrong side:a long’s stop above the entry isn’t a risk.
- No conversion rate:the loss at the stop is in another currency and there’s no rate at entry to convert it.
- Unusable stop as a rate:for USD/JPY in a USD account the stop doubles as the exchange rate, so a stop at zero or below can’t be used.
To see R for every trade, record the initial stop when you log it, and keep it as the first stop even if you move it later.
What is the difference between planned R and R?
Planned R is set before the trade: the distance to your target ÷ the distance to your stop, from prices alone. R is measured after the trade closes, from its net P&L, so comparing the two shows how your exits and costs changed the plan.
A trade planned at 2.00R that you closed early for +1.46R gave up part of its target; one planned at 2.00R that closed at −1.04R hit its stop and paid costs. Work out planned R before you enter with the risk reward calculator.