Determine the mathematical viability of your trade setup. Enter your entry, take profit, and stop loss to calculate your R:R ratio and precise risk amounts.
Awaiting calculation...
Potential Reward
0.00%
+$0.00
Potential Risk
0.00%
-$0.00
Win Rate Required to Break Even
0%The Risk/Reward (R:R) ratio is the holy grail of profitable trading. It compares the amount of money you are willing to lose on a trade to the amount you expect to make.
With a high enough Risk/Reward ratio, you can actually lose more trades than you win and still be highly profitable in the long run. Professional traders rarely take setups with a ratio lower than 1:2.
Here is the required Win Rate to break even based on your Risk/Reward ratio:
To improve your ratio, you must either tighten your Stop Loss (which increases the chance of being stopped out prematurely) or aim for a higher Take Profit target. Find a balance using technical support and resistance levels.
Not necessarily! If your trading strategy has an extremely high win rate (e.g. 70%+), a 1:1 or even a 1:0.5 ratio can still be highly profitable. Scalpers often use lower R:R ratios but rely on high strike rates.
Download the complete quantitative guide: Position Sizing Formulas, Prop Firm Drawdown Rules, and MQL5 Parameter Cheat Sheets.
