How often do you need to be right? It depends on how much you win compared with how much you lose. Enter your risk–reward ratio and this calculator shows the win rate you need to break even – and whether your own win rate gives you an edge.
Break-Even Win Rate Calculator
How often you must win to break even at your risk–reward ratio.
Results are estimates for information only, not financial advice. Trading on leverage carries a high risk of losing money.
Win Rate And Risk–Reward Work Together
A strategy’s profit depends on two numbers: how often it wins, and how big the wins are compared with the losses. Neither tells you anything on its own.
If you risk $100 to make $100 (1:1), you must win more than 50% of your trades to make money. If you risk $100 to make $200 (1:2), you only need to win more than a third. If you risk $100 to make $50, you need to win two thirds of the time just to break even.
How To Use The Calculator
- Enter your risk–reward ratio as reward ÷ risk. For a 1:2 trade, enter 2.
- Add your costs per trade (optional) in R – your spread and commission as a share of the amount you risk. If you risk $100 and pay $5 in costs, enter 0.05.
- Add your own win rate (optional) to see your edge per trade.
The calculator shows the break-even win rate, how many losing trades out of ten you can afford, and your edge per trade in R. The table shows the break-even win rate for common ratios.
The Formula
Break-even win rate = (1 + costs) ÷ (1 + reward–risk ratio).
Without costs, a 1:2 ratio needs a 33.3% win rate. With costs of 0.05R, it needs 35%.
Why It Matters To Traders
Many traders chase a high win rate and end up taking small profits and large losses. Others aim for big targets and are discouraged by losing streaks, even though their strategy is profitable. Knowing your break-even win rate puts both in perspective: a 40% win rate is excellent at 1:2, and a 70% win rate can lose money at 1:0.3.
Costs matter most for short-term strategies with small targets, where they can add several percentage points to the win rate you need.
Tips
- Measure your real win rate over at least 30–50 trades before drawing conclusions.
- Plan your targets with the risk–reward calculator.
- For the full picture, including average win and loss sizes, use the expectancy calculator.
Related Trading Calculators
Alternatively, see our full suite of free online trading calculators.
DayTrading.com’s free trading calculators are for education and planning only and are not financial advice. Trading with leverage is high risk, and you could lose any money you invest. Trade responsibly.