Target price calculator
Set your take profit from the risk/reward ratio you want and check if the trade is worth it before you enter.
By the TradingCalculator.Pro team · Updated on · About us
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Formula
Target = Entry ± (Risk × R:R ratio)How it works
The target price comes from the risk, not from the wish. You measure the distance from entry to stop, multiply by the risk/reward ratio you demand and project it from the entry in the direction of the trade. That is all the arithmetic there is.
What decides whether the trade is worth taking is crossing that ratio with your hit rate. At 1:2 you need to be right more than 33.3% of the time just to break even; at 1:1, more than 50%; at 1:3, more than 25%. The target does not go where you would like price to reach, but where the chart allows it to — and if the ratio does not work there, this is not the trade.
What you get
- Target price by R:R ratio
- Potential profit in % and money
- Validate your minimum R:R
Worked example
Long a stock at $182.40 with the stop at $178.90, 300 shares.
- Risk per share: 182.40 − 178.90 = $3.50.
- Total risk: $3.50 × 300 = $1,050.
- Target at 1:2: 182.40 + (3.50 × 2) = $189.40.
- Target at 1:3: 182.40 + (3.50 × 3) = $192.90.
At 1:2 the target is $189.40 and the potential profit $2,100; at 1:3, $192.90 and $3,150.
Before accepting 1:3, look at the chart: if there is a resistance between 189 and 193 that has rejected price three times, that target is not more ambitious, it is less likely. Raising the ratio on paper does not raise expectancy if it lowers the hit rate in the same proportion.
How to use it
- Enter your inputs: the terms of the formula (capital, risk, prices and stop).
- The calculator applies the formula and returns the result in your instrument's units.
- Check the breakdown before trading: anything that cannot be computed is shown empty, never as zero.
Frequently asked questions
How do you calculate a take profit at a 1:2 ratio?
Double the distance from entry to stop and add it to the entry. Entering at $182.40 with the stop at $178.90, the risk is $3.50 and the target is 182.40 + 7.00 = $189.40. Short trades subtract instead of adding.
What minimum risk/reward ratio should I demand?
Whatever makes your real hit rate profitable, not a textbook number. A system hitting 55% is profitable at 1:1; one hitting 35% needs better than 1:1.86 just to break even. Demanding 1:3 from a 55% system usually makes it worse, because distant targets go unreached and winners turn into losers.
Is the target set before or after sizing?
After the stop and the size, but before sending the order. The stop defines the risk, the risk defines the size, and the target defines whether it is worth doing. If the reasonable target the chart allows does not give the ratio you demand, the right call is not to trade, not to tighten the stop until it fits.
How do I calculate the target on a chart pattern?
With the measured move: take the height of the pattern and project it from the breakout point. On an inverse head and shoulders with the neckline at $41.80 and the head at $37.20, the height is $4.60 and the measured target $46.40. That projection is a statistical expectation, not a promise.
What break-even hit rate does each ratio need?
The minimum hit rate is 1 divided by (1 + R:R). For 1:1 that is 50%; for 1:2, 33.3%; for 1:3, 25%; for 1:5, 16.7%. And that is before commissions and slippage, which in intraday trading usually eat between two and five percentage points of that margin.