R-Multiple: How Limbix Measures Risk and Reward

An R-multiple is a trade's result measured in units of what you risked. In Limbix, risk comes from your stop: the distance from entry to stop, times the instrument's point value, times your quantity. A trade that risked €200 and made €400 is +2R. One that lost €200 is −1R, whatever the instrument.

$$\begin{aligned} \text{Risk amount} &= |\text{entry} - \text{stop}| \times \text{point value} \times \text{quantity} \\ \text{Realized R} &= \frac{\text{Net P\&L}}{\text{Risk amount}} \\ \text{Expected R:R} &= \frac{|\text{target} - \text{entry}|}{|\text{entry} - \text{stop}|} \end{aligned}$$

Stop

The stop loss on the trade. It must sit on the losing side of entry, or there is no risk amount.

Point value

What a 1.00 price move is worth per contract or unit, from the instrument list.

Net P&L

P&L after fees.

Target

The take profit. It must sit on the winning side of entry.

Why Limbix measures every trade as an R-multiple#

Euros can't compare a scalp on a micro contract with a swing on a full-size one. R can. It asks one question of every trade: when you were wrong, did the loss stay the size you planned?

No stop on a losing trade. Limbix uses the exit price as the stop you never had. What the market took is what you risked, so the trade lands at about −1R. It is marked as exit basis. Dropping these trades would hide exactly the undisciplined losses R exists to show.

No stop on a winning trade. No R at all. A win says nothing about what was at risk, and inventing a denominator from the exit would hand you a flattering +1R from nothing.

Exit-basis losers are left out of Loss Containment. They are −1R by construction, so counting them would score a trader who never uses stops a perfect 100.

Example#

Say one point is worth €50 on the instrument you trade. You go long 2 contracts at 100.00, stop at 98.00, target 106.00. You exit at 104.00 and pay €10 in fees.

• Risk amount = 2.00 × 50 × 2 = €200
• Expected R:R = 6.00 ÷ 2.00 = 3.0
• Gross P&L = 4.00 × 50 × 2 = €400, so net P&L = €390
• Realized R = 390 ÷ 200 = +1.95R

Now the same entry with no stop, exiting at 97.50 for a €250 loss plus €10 fees. The exit stands in as the stop: risk = 2.50 × 50 × 2 = €250, net P&L = −€260, realized R = −1.04R on exit basis.

CalculatorR-multiple

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Direction

LongShort

Entry price

Stop priceLeave empty if you had no stop

Exit price

More: target price, contracts, value of one point, fees

Target priceOptional

Contracts

Value of one point€

Fees€

+1.95RYou made 1.95 times what you risked.Risk = 2.00 × €50 × 2 = €200Net P&L = €400 − €10 fees = €390R = €390 ÷ €200 = +1.95RPlanned R:R = 6.00 ÷ 2.00 = 3.0

Where it affects your numbers#

• Avg R and the R-multiple distribution use realized R. Trades with no R fall in the "No R" bucket.
• Risk Consistency compares each trade's risk amount with your median.
• Loss Containment counts planned-basis losers that closed at their stop, with a small allowance for slippage and fees.
• Risk Rule Adherence checks risk amount against your cap and expected R:R against your playbook's minimum.
• Your stand-down line in R adds up realized R through the day.

Point values come from the instrument list. A symbol with no known point value has no risk amount, so none of the above can use it.

Frequently asked questions#

What does R mean in trading?#

R is the amount you risked on a trade, set by the distance to your stop. Results are then counted in multiples of it: +2R made twice what you risked, −1R lost exactly what you planned. It lets you compare trades of different sizes and instruments on one scale. In Limbix, realized R is net P&L divided by that risk amount.

Why does my losing trade show −1.03R instead of −1R?#

Because Limbix uses net P&L, after fees. A stop that filled exactly where you placed it still loses the fees on top, so the result lands a little past −1R. That is why Loss Containment allows a small margin past −1R for slippage and fees before it counts a stop as run past.

Why does my winning trade have no R?#

It has no stop recorded. Limbix only measures a winner's R against a stop you actually set. Open the trade in Trade Log, click Edit, fill Stop loss with the price you really had, and click Save changes. R is recomputed at once.

Is expected R:R the same as risk-reward ratio?#

Yes. Expected R:R is the distance from entry to target divided by the distance from entry to stop, from the prices you planned. It needs both a stop and a take profit on the correct sides of entry. Your playbook's minimum R:R is checked against it in Risk Rule Adherence.