A trade result expressed as a multiple of the amount initially risked; a +2R trade made twice what it risked.
Risk and reward on one trade. One trade on a price scale: the entry sits 2.00 points above the stop and 6.00 points below the target, so the shaded reward band is three times the risk band. The ratio compares what is lost if the stop is hit with what is gained if the target is reached.
R is the distance from your entry to your stop-loss, in dollars. A trade closed at target for three times that distance is +3R; a trade stopped out is -1R. Measuring in R normalizes results across different position sizes and instruments.
Thinking in R keeps the focus on process. It also makes expectancy easy to compute from your trading-journal.
Example: entry $50, stop $48, so 1R = $2 per share. Exit at $56 is +3R. On 100 shares that is +$600 on $200 risked.