One Formula for R Across Longs and Shorts

[Fairman]

One Formula for R Across Longs and Shorts

Goal: a single column that converts any trade into an R multiple, from the entry, stop, and exit prices.

Layout. Column A direction, "L" or "S". Column B entry. Column C stop. Column D exit. Column E for R.

Logic. Risk per unit is the distance between entry and stop. Result per unit is exit minus entry for longs, and entry minus exit for shorts. R is result divided by risk.

In E2:

=IF(A2="L",D2-B2,B2-D2)/ABS(B2-C2)

Test one. A long: entry 1.1000, stop 1.0975, exit 1.1050. Result 0.0050. Risk 0.0025. R equals 2.0.

Test two. A short: entry 1.1000, stop 1.1020, exit 1.0980. Result 0.0020. Risk 0.0020. R equals 1.0.

Test three, a loss that hit the stop: long, entry 1.1000, stop 1.0975, exit 1.0975. Result minus 0.0025. R equals minus 1.0.

Test four, a stop that slipped: long, same entry and stop, exit 1.0965. Result minus 0.0035. R equals minus 1.4. This is how slippage and widened stops show up: a loss larger than 1R.

Add a flag column: =IF(E2<-1.05,"CHECK","") to mark any loss beyond the plan by more than 5 percent.

Because the formula uses prices and not pips, it works for yen pairs, gold, and indices without changes.

Use the plan's stop, not the stop you ended up with, in column C, so that stop widening is visible.

Exercise: recompute R for your last ten trades from raw prices, and compare with your records.