ClearPath Trader

Risk Reward Ratio

Potential reward divided by potential risk for a planned trade (e.g., 2R). Position management metric, not a price oscillator.

Category: Technical · Complexity: ★★★☆☆ (3/5)

Tags: technical, study-card, price

Study card — educational illustration only (no live overlay in Charts).

Risk Reward Ratio chart illustration

Formula

Risk Reward Ratio is computed from price, volume, breadth, or macro prints depending on class (Technical). See the description for the defining inputs.

How to read

Read Risk Reward Ratio as a labeling tool: it describes a condition (trend, stretch, participation, or macro). Confirm with price structure, not the indicator alone. This entry is a study card — not every encyclopedia model has a live chart overlay.

Limitations

Risk Reward Ratio can lag, repaint (some drawings), or stay extreme in trends. It is not financial advice and not a broker signal.

Typical settings

Use the author's original defaults first; change one parameter at a time.

Risk Reward Ratio is part of the ClearPath Encyclopedia of Indicators — 190 models explained with standard SVG illustrations, so you can study an indicator before you put it on a live chart.

Browse the full indicator directory →