An R-Multiple expresses an outcome in units of risk defined before an exercise or trade. It gives records a common scale; it is not a return target or promise.
Key concepts
- R and 1R
- R is the pre-planned risk unit for one position. 1R equals that planned risk amount.
- 2R
- Two units of the defined risk, used to describe a recorded multiple rather than recommend a return.
Learn it step by step
- 1Example: with a $10,000 account and 0.5% planned risk, 1R equals $50.
- 22R is $100 in this example; it describes twice the risk unit, not a suggested result.
- 3In a review log, record the planned and observed result in R units and note execution differences.
No fixed return rate is recommended. Actual outcomes may differ from the plan.