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Most successful money managers think in terms of risk/reward. This visualizer helps you understand how your profits and losses are related to your initial risk.

The risk/reward ratio, as Investopedia states, is a ratio that compares "

The visualizer consists of two graphs, Distribution (upper) and Contribution (lower).

These bins aggregate the simulated trade results expressed as risk/reward ratio. A bin contains all trades with a risk/reward value

The X axis contains the risk/reward bins (equal to the number of trades or 10, whichever is less). Winning and losing bins are colored green and red accordingly. The Y axis contains the combined total amount of risk/reward units generated by trades in a bin.

These bins aggregate the simulated trade profit or loss expressed as risk/reward ratio. A bin contains the accumulated contribution of a particular risk/reward group. For example, the "2" bin on the figure above contains trades with risk/reward ratios less than or equal to 2. In this case, there was 1 trade with risk/reward ratio 2:1.

On a final note, keep in mind that your risk/reward analysis is somewhat limited if it doesn't account for the winning percentage as well as time in the trade - although more subtle, but still a risk.

- Risk/Reward Ratio in Investopedia
- The Risk-Reward Ratio at About.com
- Analyzing risk to reward ratios in your trading at Otrader

- Risk/reward ratio is calculated for trades that have a correctly defined RiskStopLevel only.
- Both graphs include closed and open trades.
- More risk/reward numbers could be found in the Performance+ tab.