What win rate does a risk/reward ratio need?

To break even, a setup must win at least 1 ÷ (1 + reward:risk) of the time: 50% at 1 : 1, 33.3% at 2 : 1 and 25% at 3 : 1. A higher ratio needs fewer winners, but a target further away is usually reached less often.

What is expectancy in R?

R is the amount risked on a trade. Expectancy is the average result per trade in R: win rate × reward:risk − loss rate. At a 40% win rate and 2.5 : 1, it is +0.4R — $100 a trade when 1R is $250. Fees and slippage reduce it.

Free tool · Risk/reward · no signup

Risk/reward ratio calculator with breakeven win rate What the setup needs to pay.

Turn an entry, stop and target into a reward:risk ratio, the win rate it needs to break even and, with your win rate, the expectancy per trade in R.The target pays 2.50 : 1 on the risk, so the setup breaks even at a 28.6% win rate. At a 40.0% win rate, the average trade comes to +0.4R.

Reward:risk

2.50 : 1

Win rate to break even

28.6%

Track your trades free Edit the inputs

Risk per share

$2.00

−4.0%

Reward per share

$5.00

+10.0%

Reward per $1 risked

$2.50

Expectancy per trade

+0.4R

Your inputs

Example values are provided. Replace them with your own plan. Prices are in USD per share.

Entry price ($/share)

Stop-loss price ($/share)

Target price ($/share)

Your win rate (%, optional)

The share of your trades that reach the target. Adds the expectancy per trade.

Your estimate

Reward and risk are measured per share from the entry to the target and to the stop. Break-even win rate = 1 ÷ (1 + reward:risk); expectancy = win rate × reward:risk − (1 − win rate).

Reward:risk: 2.50 : 1
Win rate to break even: 28.6%
Expectancy per trade: +0.4R
Risk per share: $2.00 (-4.0%)
Reward per share: $5.00 (+10.0%)
Reward per $1 risked: $2.50
Direction: Long

Assumes every trade exits exactly at its stop or its target. Partial exits, slippage, fees and changing win rates are not modeled, and a past win rate does not predict the next trades.

Track your trades in a free YieldCove account: your real win rate, reward:risk and expectancy are measured for you.

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Worked example

The default scenario, computed with this tool’s own math — replace the inputs above with your trade.

An entry at $50.00, a stop at $48.00 and a target at $55.00 risk $2.00 a share to make $5.00: 2.50 : 1. At that ratio, winning 28.6% of trades only breaks even. With a 40% win rate, the average trade comes to +0.4R.

Reward:risk: 2.50 : 1
Win rate to break even: 28.6%
Expectancy per trade: +0.4R
Reward per $1 risked: $2.50

Common questions

What the numbers mean — and what they leave out.

What win rate does a risk/reward ratio need?: To break even, a setup must win at least 1 ÷ (1 + reward:risk) of the time: 50% at 1 : 1, 33.3% at 2 : 1 and 25% at 3 : 1. A higher ratio needs fewer winners, but a target further away is usually reached less often.
What is expectancy in R?: R is the amount risked on a trade. Expectancy is the average result per trade in R: win rate × reward:risk − loss rate. At a 40% win rate and 2.5 : 1, it is +0.4R — $100 a trade when 1R is $250. Fees and slippage reduce it.

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