How to Use the Risk-Reward Matrix in TradrLab

The Risk-Reward Matrix helps you evaluate the quality of your trading scenario by testing how price reacts to different stop loss and take profit combinations.

You’ll see exactly how often your setup hits 1R, 2R, 3R — all the way up to 10R — before getting stopped out.

🔧 How It Works

1. Create or open a saved scenario
   Describe your setup using plain English (e.g. “Show me every time GBP/USD breaks above the 20 EMA with strong volume”).

2. Click “Analyse Scenario”
   Then select Risk-Reward Matrix from the analysis tools.

3. Set your parameters:

   • Direction: Choose Buy or Sell

   • Horizon: The number of minutes or bars to measure price movement after the signal

   • Stop Min/Max: The range of stop loss sizes (in pips) to test

   • Trigger bar/value: Where the entry is taken (e.g. next bar open)

4. Click Generate
   The matrix will test every stop value in your range and display how the setup performed at every R:R level from 1:1 up to 10:1.

🧠 How to Read the Matrix

Each row = a stop loss size
Each column = a reward multiple (1R to 10R)

You’ll see:

• % Stopped Out: How often the setup hit the stop loss

• 1X to 10X: % of times the setup reached that reward multiple before hitting the stop

🔍 Example:

Let’s say you test a Buy setup with stop sizes from 10 to 20 pips.

• 13-pip stop

  • Stopped out: 47.6%

  • Hit 1R (1:1): 50.4%

  • Hit 2R (2:1): 32.1%

  • Hit 3R (3:1): 22.4%

That means:
📈 Half the time, price reached a 1:1 reward
📉 32.1% of the time, it hit 2:1
💥 Only 22.4% hit 3:1 before hitting the stop

🔥 Why It Matters

This tool helps you:

✅ Find the best stop size for your setup
✅ Understand how far price usually runs
✅ Spot reward levels with strong probabilities
✅ Build realistic targets instead of guessing