Thinking in R-multiples

Risk & Position Sizing

Measuring trades against their own risk

An R-multiple measures a trade relative to its own risk. Risk $100 and make $300, that's a +3R trade. Risk $100 and lose the full $100, that's a -1R trade. Dollar amounts vary, R stays comparable.

Comparable across any account size

Thinking in R instead of dollars lets a trader compare a $500 account and a $50,000 account on the exact same scale, since both are just measuring multiples of whatever was risked.

A cleaner journal

A trading journal built around R-multiples turns 'I made $340 today' into a much more useful 'I made 2.1R today,' a number that stays meaningful no matter how the account size changes over time.