R-multiple
R-multiple measures a trade's result in units of what you risked. Risk 100 dollars and make 200 and the trade is 2R. It lets you compare trades of any size.
In depth
R stands for your risk on that trade: the distance from entry to stop, times your size. Buy at 100 with a stop at 98 and 100 shares, and 1R is 200 dollars. Sell at 104 and you made 400 dollars, which is 2R. Get stopped and you lost 1R.
Dollars hide the decision. A 2,000 dollar loss sounds terrible, but if 4,000 was the risk you accepted, it was half of that, which is fine. Once every trade is in R, a 5 dollar stock and a 500 dollar stock sit in the same column.
Why it matters
Without R, position size drowns out skill. Your biggest winners look like your best decisions when they were only your biggest bets. Traders keep taking a setup that pays 0.4R and drop one that pays 2R, because the small days made the good one look small in dollars.
TraderLog imports your fills and the stats page reports average winner, average loser, profit factor and expectancy, which is the same idea in dollar form. The free R-multiple calculator turns a single trade into R before you take it.
Frequently asked questions
Anything above zero across many trades. Win 40 percent at 2R and lose 60 percent at 1R and you are ahead.
Take your entry minus your stop, times your position size. That dollar figure is 1R for that trade.
Keep your R-multiple trades on the record in TraderLog
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