R-multiple

R is your initial risk on a trade: the distance from entry to stop, multiplied by position size. Fix it at the moment you enter, and every outcome afterwards gets expressed as a multiple of it. As Trade Risk frames it, the R-multiple is simply profit or loss divided by that initial risk.

So a trade that made twice what it risked is +2R, whether that was pennies on a micro lot or a serious sum on a funded account. Same number. Same information.

That is the point. Dollars change meaning every time your account size or lot size changes, so a $500 winner tells you nothing on its own. Was it a scraped +0.4R on an oversized position, or a clean +3R on a small one? One of those is a habit worth keeping. Dollars cannot tell them apart. R can.

Once every trade is logged in R, they add up into something honest. Your average R per trade is your expectancy. P&L Ledger states the standard form: expectancy in R equals win rate times average winning R, plus loss rate times average losing R, with losses carried as negatives.

What R exposes that an equity curve politely hides:

• Cutting winners early. Your average winner comes in below the RR your rules targeted. Green months, leaking edge.
• Not honouring your own risk. Any loss worse than -1R means the stop moved, or you sized past your plan, or you let slippage go unmodelled.
• Sizing inconsistently. One -3R print sitting in a book of -1R losses is not bad luck. It is a rule you broke once.
• Confusing variance with edge. A handful of fat R-multiples is a sample. It is not a system.

The discipline is unglamorous: state your R before you know the outcome, at the moment you click. If you cannot say what 1R is on this trade, you do not have a trade. You have a position and a hope.