An R-multiple expresses a trade's realized net result relative to the initial risk planned before entry. If 1R was $100, a net result of +$200 is +2R and a loss of $100 is -1R.
How traders use it
The shared unit makes trades of different monetary sizes easier to compare in a journal. The starting 1R must remain the amount originally at risk; changing it after the result is known makes the comparison meaningless. Gaps, slippage and fees can also push an actual loss beyond -1R.
An R-multiple is a realized result, not the planned risk/reward ratio. A sequence of positive R-multiples does not by itself prove a repeatable edge. See R-multiple for calculation, missing-data rules and portfolio use.
Sources
- Van Tharp Institute, Tharp Think Trading Concepts — defines initial risk, R and R-multiples.
- CME Group, Proper Position Size — connects entry, stop distance and position size to planned monetary risk.