Why dollars are not enough
One trade made $100 and another $50 — which was better? The question is meaningless without the risk. If the first risked $200 and the second risked $10, the second was far better: −0.5R against +5R.
The R-multiple solves this by converting every result to one unit, so a gold trade, a euro trade and a differently sized trade become addable and comparable. That is a precondition for any later analysis: both expectancy and profit factor are computed on a unit-consistent record, not on scattered dollars.
The shared reference record
The same record used across the other performance pages: 100 trades, 40 winners averaging +2R and 60 losers averaging −1R, for an expectancy of +0.20R per trade.
Reusing one record across pages is deliberate: you can compare the measures directly instead of comparing different examples, and it becomes visible that each one views the same thing from an angle, and that none is sufficient alone.
The formula
R-multiple = trade result ÷ amount risked
A worked example
A $1,000 account risking 1% — $10 a trade — makes 1R = $10:
- a trade making $20 → +2R
- a trade losing $10 at its stop → −1R
- a trade closed at break-even → 0R
- a trade losing $18 through slippage → −1.8R, a figure that exposes an execution problem the dollar alone does not
The whole reference record is written in this unit: 40 trades at +2R and 60 at −1R, giving the system +20R across a hundred trades — a number that means the same thing whether the account is $1,000 or $100,000.
Common mistakes with this term
- Always computing R from planned risk, when slippage makes the realised loss larger than 1R.
- Varying the risk percentage between trades then summing R values as if they were equivalent.
- Using it to flatter a record by understating declared risk, raising the figure without any real improvement.