R multiples: stop counting dollars

3 min read · educational content, not investment advice

Money makes trades hard to compare. A $400 win on a $10,000 account is a completely different trade from a $400 win on a $100,000 account. R fixes that.

How R works

1R = the amount you risked on that trade. Result ÷ risk = your R multiple.

Why it matters

Position size stops distorting your review. You can average R across completely different trades, and you get an honest expectancy: if you average +0.3R per trade, your edge exists. If it is negative, no amount of "I was right about the direction" fixes it.

The number that should scare you

Look for losses worse than −1R. They mean the stop was moved, skipped, or the size was wrong. Fix those first — they usually account for a disproportionate share of the damage.

Tag every trade with its R in the journal and the review page does the rest.

Related reading
Put it to work
Trade journal Expectancy Position size