See what a trade has to pay before you take it — and the win rate your plan silently assumes.
Risk:Reward compares the distance to your stop against the distance to your target. Break-even win rate = risk ÷ (risk + reward) — the accuracy your plan needs just to tread water, before fees. Expectancy combines your estimated win rate with the ratio: (win% × reward) − (loss% × risk), expressed in R — a +0.36R expectancy means that over many trades, each 1R you risk returns 0.36R on average.
| Ratio | Break-even win rate | Meaning |
|---|---|---|
| 1 : 1 | 50% | You must be right more often than wrong |
| 1 : 2 | 33.4% | Right 1 time in 3 is enough |
| 1 : 3 | 25% | Right 1 time in 4 is enough |
| 2 : 1 | 66.7% | You need elite accuracy — most plans like this fail |
Trusting an estimated win rate you haven't measured. Until you have 50+ journaled trades, treat your win rate estimate as fiction and demand at least 1:2. Moving the target closer after entry — that quietly turns a 1:3 plan into 1:1 with a 1:3 win rate. Ignoring fees and slippage, which raise every break-even number, especially on lower timeframes.