What Is an R-Multiple in Trading?
An R-multiple expresses a trade’s profit or loss as a multiple of the amount you initially risked on it — known as "1R" — rather than in raw rupees. A trade risking ₹2,000 that closes at ₹6,000 profit is a +3R trade, regardless of account size, which is what makes R-multiples the standard unit for comparing trades and strategies fairly.
Formula
R-Multiple = Trade P&L ÷ Initial Risk (1R)Worked example
A trader enters NIFTY futures with a stop-loss that defines their initial risk at ₹2,500 — that is 1R. The trade runs in their favor and closes at +₹7,500 profit. R-multiple = 7,500 ÷ 2,500 = +3R.
On a separate trade, the same trader risks ₹1,000 (1R = ₹1,000) and the stop-loss is hit exactly as planned, closing at −₹1,000. R-multiple = −1,000 ÷ 1,000 = −1R. Because both trades are expressed in R, they can be directly compared and averaged, even though the rupee amounts risked were different.
What's a good number?
The average R-multiple across a sample of trades should be positive — that is effectively another way of stating positive expectancy. Many systems are built around average winners in the +1.5R to +3R range against losers capped near −1R.
If the average loser consistently runs beyond −1R (say, −1.5R), that is a signal that stop-loss discipline is breaking down — the trader is not exiting where the plan said they would.
Common mistakes traders make with r-multiple
- Not defining 1R (the initial risk) precisely before entering the trade, so the R-multiple becomes fuzzy or gets calculated retroactively to fit the outcome.
- Moving the stop-loss after entry, which invalidates the original R calculation and makes the resulting multiple meaningless for comparison.
- Comparing R-multiples across trades where the definition of 1R itself was inconsistent — for example, sometimes using the stop distance and sometimes using a fixed rupee amount.
- Letting a single large outlier (a +10R trade) flatter the average R-multiple of an otherwise mediocre or losing system.
TradeMind calculates the R-multiple for every trade automatically from the stop-loss you log at entry, so your average R and R-multiple distribution are always accurate right inside your journal.