# Risk Reward Ratio

> |

- **Type:** Skill
- **Install:** `agentstack add skill-bhala-srinivash-nse-trading-skills-risk-reward-ratio`
- **Verified:** Yes — security-reviewed for prompt injection and unsafe behavior
- **Seller:** [Bhala-Srinivash](https://agentstack.voostack.com/s/bhala-srinivash)
- **Installs:** 0
- **Category:** [Finance & Payments](https://agentstack.voostack.com/c/finance-and-payments)
- **Latest version:** 0.1.0
- **License:** MIT
- **Upstream author:** [Bhala-Srinivash](https://github.com/Bhala-Srinivash)
- **Source:** https://github.com/Bhala-Srinivash/nse-trading-skills/tree/master/risk-reward-ratio

## Install

```sh
agentstack add skill-bhala-srinivash-nse-trading-skills-risk-reward-ratio
```

Requires the [AgentStack CLI](https://agentstack.voostack.com/docs/cli). Works with Claude Code, Cursor, and any MCP-compatible agent.

## About

# Risk-Reward Ratio

If the math doesn't work, don't take the trade. R:R is the simplest filter that separates good setups from bad ones.

## Prerequisites

No dependencies required. Pure math — provide entry, stop, and target prices. No data tools needed.

## Calculation

```
Risk = Entry price - Stop-loss price
Reward = Target price - Entry price
R:R = Reward ÷ Risk

Example:
  Entry: Rs.1,800
  Stop: Rs.1,700 → Risk = Rs.100 per share
  Target: Rs.2,100 → Reward = Rs.300 per share
  R:R = 300 ÷ 100 = 3:1
```

In rupee terms:
```
Total risk = Risk per share × Number of shares
Total reward = Reward per share × Number of shares
```

## Minimum R:R by Win Rate

Your win rate determines the minimum R:R needed to be profitable over time.

| Win Rate | Min R:R (Breakeven) | Recommended Min | Trades Needed to Recover 1 Loss |
|----------|--------------------|-----------------|---------------------------------|
| 30% | 2.33:1 | 3:1 | ~3 winners |
| 40% | 1.50:1 | 2:1 | ~2 winners |
| 50% | 1.00:1 | 1.5:1 | 1 winner |
| 60% | 0.67:1 | 1:1 |  55% AND high-conviction setup |
| 1.5:1 to 2:1 | Acceptable for experienced traders with edge |
| 2:1 to 3:1 | **Good** — standard for swing trades |
| 3:1+ | **Excellent** — take these trades consistently |

## Multi-Target R:R

For trades with multiple profit targets (scaling out):

```
Target 1 (50% of position): Rs.1,900 → R:R = 1:1
Target 2 (30% of position): Rs.2,000 → R:R = 2:1
Target 3 (20% of position): Rs.2,200 → R:R = 4:1

Weighted R:R = (0.5 × 1) + (0.3 × 2) + (0.2 × 4) = 1.9:1
```

This is useful when you plan to scale out at different levels.

## Expected Value

For a more complete picture, calculate expected value per trade:

```
EV = (Win rate × Average win) - (Loss rate × Average loss)

Example:
  Win rate: 50%, Avg win: Rs.10,000, Avg loss: Rs.5,000
  EV = (0.5 × 10,000) - (0.5 × 5,000) = Rs.2,500 per trade

Positive EV = edge. Negative EV = change your approach.
```

## R:R Checklist

Before entering any trade:
- [ ] Have I identified a specific target (not just "it'll go up")?
- [ ] Is the stop-loss at a technically meaningful level?
- [ ] Is R:R at least 1.5:1 (ideally 2:1+)?
- [ ] Does the position size keep risk within 1-2% of capital?
- [ ] If this trade hits stop, will I still be fine psychologically and financially?

## Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

- **Author:** [Bhala-Srinivash](https://github.com/Bhala-Srinivash)
- **Source:** [Bhala-Srinivash/nse-trading-skills](https://github.com/Bhala-Srinivash/nse-trading-skills)
- **License:** MIT

Install and usage instructions live in the source repository linked above.

## Pricing

- **Free** — Free

## Security capabilities

Automated source analysis of v0.1.0 — what this tool can access:

- **Network access:** no
- **Filesystem access:** no
- **Shell / process execution:** no
- **Environment & secrets:** no
- **Dynamic code execution:** no

*"Yes" means the capability is present in the source — more access means more to trust, not that it is unsafe.*


## Versions

- **0.1.0** — security scan: passed — Imported from the upstream source.

## Links

- Listing page: https://agentstack.voostack.com/l/skill-bhala-srinivash-nse-trading-skills-risk-reward-ratio
- Seller: https://agentstack.voostack.com/s/bhala-srinivash
- Browse the marketplace: https://agentstack.voostack.com/browse

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Listed on AgentStack — the marketplace for AI agent skills and MCP servers. Every listing is security-reviewed. Creators keep 70%.