R-multiple is a simple way to measure trading performance relative to the amount you risked. Instead of focusing only on dollars or percentages, it expresses the result of a trade in units of risk.
What does 1R mean?
1R is the amount you chose to risk on a trade. If your stop-loss represents a $100 loss, then $100 is 1R. If your risk is $500, then $500 is 1R.
A trade that earns twice the original risk is +2R. A full stop-loss is typically -1R. A break-even trade is around 0R.
Why R is useful
R allows traders to compare trades regardless of account size. A +3R trade has the same risk-adjusted meaning whether the trader risked $50 or $500.
This is useful when reviewing a strategy because it separates execution quality from position size.
Win rate is only part of the picture
A strategy can have a moderate win rate and still produce a positive total result if the average winner is larger than the average loser. The opposite can also happen: a high win rate can still lead to poor results if losses are much larger than wins.
That is why total R and average R per trade can be more informative when viewed alongside win rate.
A simple example
Suppose a trader has ten trades. Five lose -1R each, four win +2R each and one finishes at break-even. The total result is +3R even though only four of ten trades were winners.
This shows why risk-to-reward and outcome distribution matter.
How to use R responsibly
R does not tell you what amount you should risk. That decision depends on your own account, tolerance for loss and trading plan. The purpose of R is simply to create a consistent measurement framework.
If a historical indicator sample shows +23R, that describes the sum of the recorded outcomes in risk units for that specific sample. It does not mean every trader would have made the same dollar amount because actual execution, position sizing, spreads and trade management can differ.
Why NGF uses R
NGF uses R-based performance information because it gives traders more context than a percentage alone. It helps show how the balance between wins, losses and break-even trades contributed to the overall historical result.
Displayed results are historical indicator data for the stated timeframe and sample. They are not a guarantee of future performance. Trading involves risk, and users remain responsible for all trading and risk-management decisions.