Break-Even Win Rate by Risk-to-Reward Ratio
Last updated: November 2026 · 2 min read · Educational content, not financial advice
Key takeaways
- Break-even win rate = 1 ÷ (1 + R). At 1:2 it is 33.3%; at 1:3 it is 25%.
- Costs push the line up: (1 + c) ÷ (1 + R), where c is the average cost per trade in R.
- A bigger target lowers the break-even rate but usually lowers your real win rate too, so compare setups by expectancy.
Every risk-to-reward ratio has a break-even win rate: the percentage of trades you must win just to finish flat. Win more than that and you have a positive edge; win less and the strategy loses money, however good individual trades feel.
The formula
Here R is your reward-to-risk ratio. It comes straight from setting expectancy to zero: W × R − (1 − W) = 0, which rearranges to W = 1 ÷ (1 + R).
Reference table
| Reward : Risk | Break-even win rate | Losing trades you can afford per 10 |
|---|---|---|
| 1 : 0.5 | 66.7% | 3.3 |
| 1 : 1 | 50.0% | 5.0 |
| 1 : 1.5 | 40.0% | 6.0 |
| 1 : 2 | 33.3% | 6.7 |
| 1 : 3 | 25.0% | 7.5 |
| 1 : 4 | 20.0% | 8.0 |
| 1 : 5 | 16.7% | 8.3 |
| 1 : 10 | 9.1% | 9.1 |
Read the table as a floor. A trader using a 1:2 ratio needs to win more than one trade in three. A trader using 1:0.5 has to win two out of three just to break even, which is a much harder standard to maintain.
Costs raise the bar
Spreads, commissions and slippage make every trade slightly worse than the ratio on your chart. If the average cost per trade is c (in R), the break-even win rate becomes:
At 1:2 with a cost of 0.10R per trade, the break-even win rate rises from 33.3% to 36.7%. At 1:1 with the same cost, it rises from 50% to 55%. The tighter your targets, the more costs matter, which is why very small targets are hard to trade profitably.
Examples from the calculator's presets
- Scalper (1:1.5, 60% win rate): the break-even point is 40%, so the 60% win rate leaves a cushion of 20 points. Expectancy is +0.50R.
- Swing trader (1:5, 35% win rate): the break-even point is 16.7%. Expectancy is +1.10R even though the setup loses almost two trades in three.
- Prop-firm style (1:2, 55% win rate): the break-even point is 33.3%. Expectancy is +0.65R.
Higher reward-to-risk is not automatically better
Pushing your target further away lowers the break-even win rate, but it usually lowers your actual win rate as well, because price has to travel further before it hits the target. The question is never “what ratio is biggest?” but “what is my measured win rate at this ratio, and is it above the break-even line by a comfortable margin?” Compare setups by expectancy, not by target size.
The margin of safety
Your measured win rate is an estimate, and estimates from short samples are noisy. If your break-even win rate is 33% and your measured win rate is 36% over 40 trades, that gap is well within random variation. A larger gap, or a larger sample, gives you more confidence that the edge is real.
Try the numbers yourself
See a 25% win rate at 1:3 in the calculator.
Related guides
This guide is for education only. It is not financial advice or a trade recommendation, and trading involves substantial risk of loss. See the Terms of Service.