Calculate risk-to-reward ratios, expected value, and breakeven win rates for your trade setups.
With 50% win rate and 1:2.00 R:R, you need at least 33.3% win rate to break even.
The Risk/Reward Ratio (R:R) compares the potential loss (risk) to the potential profit (reward) of a trade. A 1:2 R:R means you risk $1 to potentially make $2.
With a 1:2 R:R ratio, you only need to win 33.3% of your trades to break even. This means you can be wrong on most of your trades and still be profitable.
EV = (Win Rate × Average Win) − (Loss Rate × Average Loss)
A positive expected value means the strategy is profitable over time, regardless of individual trade outcomes.