R-Multiple (R) Explained: The Best Trading Metric for Risk Control
Learn what R-multiple means in trading, how to calculate it, and how using R improves consistency, journaling, and strategy evaluation.
R-multiple (R) converts every trade into a standardized result based on planned risk. It is one of the cleanest ways to evaluate performance without distortion from position size.
The definition
1R equals your planned risk on a trade. If you risk $100, then:
- +$200 = +2R
- -$100 = -1R
- +$50 = +0.5R
How to calculate R
- Set the risk amount in dollars.
- Record the trade result in dollars.
- Divide result by risk.
R = Result / Risk
Why R is powerful
- It makes trades comparable across markets.
- It enforces discipline around fixed risk.
- It highlights whether your edge is real.
Journaling with R
Track these weekly:
- Average R per trade
- Win rate
- Largest loss in R
- Number of trades above +2R
- Number of losses worse than -1R