ALGUSD Risk/Reward Ratio Calculator

Comparing how much you stand to lose against how much you stand to gain, before entering a ALGUSD trade, is what a risk/reward ratio measures — a ratio worse than 1:1 means you need to win more often than half the time just to break even.

How do I calculate risk/reward ratio for ALGUSD?

Say a trader plans a ALGUSD long (buy) at 0.12, with a stop loss at 0.12 and a take profit at 0.13 — 5 points of risk against 10 points of reward.

What counts as a good risk/reward ratio?

Most professional traders target a minimum of 1:2, with many aiming for 1:3 or higher for better long-term profitability. The ratio directly sets the breakeven win rate — the percentage of trades that need to win just to come out flat, before any edge at all.

At this trade's 1:2.00 ratio, winning more than 33.3% of the time means the strategy is profitable over time, even with plenty of losing trades along the way — the ratio does the heavy lifting, not a high win rate.

Can I be profitable with a lower win rate using a good ratio?

Yes — at a 1:3 ratio, roughly a 26% win rate is enough to break even before costs, meaning a strategy can lose most of its trades and still be profitable if the ratio is strong enough. This is exactly why the ratio and the win rate have to be read together, never one without the other.

Conclusion

This is instrument-agnostic math — the same ratio and breakeven calculation apply to any ALGUSD trade regardless of lot size, since it only depends on price distances, not dollar amounts. For the actual dollar risk and reward at a given lot size, use this instrument's Profit & Loss or Pip Value calculator alongside this one. See the general risk/reward method, worked through step by step, and a worked risk/reward example, including the planned-vs-realised distinction.

Frequently asked questions