R multiple in gold trading
An R multiple expresses a trade's result as a multiple of the initial risk: a trade risking $100 that makes $250 is +2.5R, one that loses $100 is −1R.
Also called R, Risk unit, 1R
R is the amount risked on a trade, defined by the distance from entry to stop-loss multiplied by position size. An R multiple states the outcome in units of that risk. A trade that risks $100 and makes $300 is +3R; a trade that loses the full stop is −1R; a trade closed early for a $40 loss is −0.4R. Thinking in R strips out account size and lot size and lets trades be compared on equal terms.
How it applies to gold trading
Gold trades can have very different stop distances: $5 on a scalp, $40 on a swing. In dollars the results are hard to compare; in R they are not. A scalper’s +2R and a swing trader’s +2R are the same quality of outcome. R also makes expectancy simple: average the R of all trades and you have the expected return per unit of risk.
Suppose a journal shows 40 trades: 16 winners averaging +2.2R and 24 losers averaging −0.9R. Total R is 35.2 − 21.6 = +13.6R, or +0.34R per trade. If the trader risks $100, that method earns about $34 per trade on average over time.
A common mistake
Reporting R multiples using the planned stop when the actual loss was larger because of slippage. R should be measured against the dollars actually lost at the stop, otherwise the record flatters the method.
See also: Risk-reward ratio, Expectancy, Risk per trade, Trading journal.
Frequently asked questions
What is a good average R multiple?
Any positive average R per trade, after costs, means the method makes money over time. The size of the number matters less than its stability across a large sample and across market conditions.
Is a 3R target realistic on gold?
It depends on the stop. A $10 stop with a $30 target is 3R and is reachable on many days; a $40 stop needs a $120 move for 3R, which is rare in a single day. Targets should come from the chart, with R as the measurement.