Risk/reward and win rate: why 1:2 doesn't need 50% wins

@founder · 19 set, 08:02

Many beginners think they need to be right most of the time. The math says otherwise. If you risk 1 unit to make 2 (risk/reward 1:2), the break-even win rate before costs is only 33.3%: with 3 trades you lose 1 unit twice and win 2 units once, so you finish flat. Quick table (break-even win rate before costs): - 1:1 requires 50% - 1:2 requires 33.3% - 1:3 requires 25% The catch: a higher target is less likely to be reached, so the win rate usually falls as the ratio rises. And spreads and commissions raise the break-even point. What matters is the expectancy: (win rate x average win) - (loss rate x average loss). Track it over at least 50-100 trades before drawing conclusions. What ratios do you usually aim for? Note: educational content, not financial advice. Trading involves risk.