Who it's for — Anyone who wants to measure performance without anchoring to dollar amounts. **R** = planned risk per trade; outcome is expressed in multiples.
An R-multiple is trade result divided by initial risk R. Risk $100: full stop = −1R; target +$300 = +3R. Same execution is +3R whether R=$10 or R=$10,000 — measures quality, not account size.
In simple terms — «+5R this month» compares skill regardless of capital.
Why use it
| Use | Benefit |
|---|---|
| Journal | Homogeneous trade comparison |
| Emotion | −1R is operating cost, not «lost rent» |
| Expectancy | Average R per trade = system health |
Expectancy (simplified): sum of R / number of trades. +0.5R average → positive edge long term (with adequate sample).
Target losses −1R; wins often ≥ +1.5R if planned R:R supports it. Slippage may yield −1.1R or −1.2R.
Common mistake — Celebrating absolute dollars with inconsistent size — hides poor risk management.
Summary
- Theory: planned R:R.
- Reality: R-multiple at trade close.
- Tool: Journaling.
Bronze path — Core risk module complete. Index: Bronze path.