Risk-to-reward compares the distance from an entry to a possible loss level with the distance from entry to a possible target. For a long setup, divide target minus entry by entry minus stop. The ratio alone says nothing about the probability of reaching either level.
The basic calculation
For a long position with entry 1.1000, stop 1.0950 and target 1.1100, the risk distance is 0.0050 and the potential reward distance is 0.0100. The distance ratio is 2:1. This example excludes costs, slippage and position sizing.
Check direction and price geometry
For a short position, the stop is above entry and the target below it. Use absolute price distances only after confirming the levels are on the correct side of the entry. If the stop and target are not valid for the chosen direction, the calculation should be rejected.
A ratio is not a success rate
A hypothetical 2:1 ratio does not mean a setup is likely to reach its target. Outcomes depend on execution, market conditions, costs and the quality of the underlying idea. Risk management includes more than comparing two distances.