R is simply the amount you risk on a trade — your planned loss if the stop hits. Measuring outcomes in R-multiples (a win of +2R, a loss of −1R) instead of raw dollars is one of the most clarifying habits in trading, because it makes every trade comparable and your results honest.
How R works
If you risk $100 on a trade, that's your 1R. A trade that makes $250 is a +2.5R winner; one that loses $100 is a −1R loss; one stopped early for $40 is −0.4R. Now a big-account trade and a small-account trade, a cheap option and an expensive one, are all on the same scale — you're measuring skill, not position size. A +2R trade is a +2R trade whether R is $50 or $500.
Why it matters
R-multiples turn your track record into a clean expectancy number (average R per trade), which is the true measure of edge — and they enforce consistent sizing (every trade is 1R of risk, so no trade is accidentally huge). They also reframe drawdowns sanely: “down 4R this week” is a normal variance statement; “down $800” feels like a catastrophe. Thinking in R is thinking in risk, which is how professionals think.
Stop counting dollars; count R. A +2R day is a +2R day whether you traded 1 contract or 10 — and your expectancy in R is the only edge number that matters.
How to use it
Define your R (your standard per-trade risk), size every trade to it, and log results in R. Aim for setups with a target at least 2R away from your stop (a good reward-to-risk), and track your average R over time. A positive average R with consistent sizing is a real edge; a jumble of dollar wins and losses on random sizes tells you nothing. NoVo's conviction-banded sizing is R-thinking in software — consistent risk units, scaled to setup quality.