Think in R

R is the amount you plan to lose if a trade goes wrong: the distance from your entry to your stop, times your position size. A trade that makes twice that amount is a +2R trade; one that hits its stop is −1R.

Thinking in R strips out position size and price level, so a $3 move on a $40 stock and a $30 move on a $400 stock can be compared directly. It also makes your results add up: ten trades of +2R, −1R, −1R… sum to a number that means the same thing whatever you traded.

A long at 100 with a stop at 95 and a target at 110 risks 5 to make 10: 2R. Exit at 103 instead and the result is 3 ÷ 5 = +0.6R.

Losses bigger than 1R happen: when price gaps through your stop, the fill is at the open, not your stop. The simulator's earnings-gap market shows this.