Why R-multiples matter for prop firms
Prop-firm rules are expressed in account percentages. R-multiples convert your strategy's outcomes into the same units. If your average R is 1.5R and you risk 1% per trade, your average outcome is +1.5% per winning trade. Multiplied across the trade-frequency of your strategy, this gives you a directly comparable expected return against the firm's profit target.
Calculating R-multiples on your trades
R-multiple of a single trade = (Profit or loss in dollars) / (Risk in dollars). A trade that risked $500 and earned $1,250 is a 2.5R winner. A trade that risked $500 and lost $400 is a -0.8R loser. Tracking R per trade over time gives you the data needed to calculate expectancy.
Typical R distributions for profitable strategies
Most consistently profitable strategies have an average R per trade between 0.3R and 1.0R. Above that range, the strategy is rare or in unusually compatible market conditions. Below that range, variance erodes the edge over realistic sample sizes. The 0.3-1.0R band is where prop-firm challenges become statistically beatable.
Related terms
Author
Maximilian Bossow
Independent prop-firm trader. Reached FTMO Platinum tier with verifiable Overall Rewards across multiple funded accounts. Founder of MB Capitals — a coaching system for traders who want to pass prop-firm challenges through structured risk management, not gurus. The proof is on the homepage: every cert, every payout, every receipt of what it took to get there.