# How to calculate R for strategies with dynamic exit points

Calculating risk-reward ratio R is easy when trading a straight forward strategy which has its entry and exit points clear:

risk = entry - stop
reward = take_profit - entry
R = reward / risk


But what if I have dynamic exit points? For example in a trend following strategy, which after the price moves up, I move my stop_loss to break even (entry). My #1 question is, which stop_loss prices should I use, the first one or the second(which would mean risk == 0 which is a "divide by zero " problem).

Let's imagine I also move my take_profit up a few candles after entering the position. My #2 question which take_profit should I use? The one I had in mind before entering the position or the one I actually closed the position with?

Since this is to evaluate the performance of a strategy, is it a good idea to calculate it this way:

R = average_gain / average_loss

• do you mean Williams %R in technical analysis? Nov 25, 2019 at 19:59
• @develarist no I mean the risk-reward ratio. The first formula explains it simply. Nov 25, 2019 at 20:14

For anyone looking for this, I ended up calculating average_win and average_loss and then calculating the ratio as:
R = average_win / average_loss