R-Multiple
When you risk $100 on a trade and make $300, that trade is +3R. When you risk $100 and lose $100, it is -1R. When you risk $100 and lose $250 because of a slippage failure, it is -2.5R. The R-multiple framework strips out position size differences so you can compare a $50,000 trade to a $500 trade on equal footing.
R-multiples are the foundation of expectancy calculation: expectancy in R = (win rate × average winning R) − (loss rate × average losing R). A system with 50% win rate and 2R average winners with -1R losers has an expectancy of +0.5R per trade, regardless of position size.
Tracking R-multiples reveals patterns invisible in raw P&L. A trader might be net profitable but losing R consistently — winning by sizing winners larger than losers, which is fragile. The reverse — losing dollars but positive R — usually means the trader is sizing winners too small to capture the edge.
Related reading
- Position Sizing for Perpetual Futures: The Complete Guide — Blog
- Why Every Trader Needs a Trading Journal (And How to Keep One) — Blog
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