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Glossary
R-multiple
An R-multiple expresses a trade’s result as a multiple of the amount risked. If you risk $100 and make $250, the trade is +2.5R; if the stop is hit, it is −1R. Measuring in R normalizes results across position sizes and account sizes, making performance comparable and keeping the focus on risk discipline rather than raw dollars.
Thinking in R changes behavior. A trader who accepts −1R losses as the routine cost of business stops moving stops; a trader chasing dollar amounts starts negotiating with the market.
R-multiples also make expectancy portable: an edge of +0.4R per trade holds meaning whether you risk $50 or $5,000 per position.
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