Risk/reward and breakeven win rate calculator

How it is calculated

• Reward-to-risk = reward distance ÷ risk distance
• Breakeven win rate = risk ÷ (risk + reward)
• After costs: net risk = risk + costs, net reward = reward − costs; breakeven = net risk ÷ (risk + reward)
• Expectancy (in R) = win rate × net reward ÷ net risk − (1 − win rate), where 1R is the full loss when the stop is hit

Worked example

Risk 5.00, reward 10.00: ratio 1 : 2 and breakeven win rate 5 ÷ 15 = 33.3%. At a 40% win rate, expectancy = 0.4 × 2 − 0.6 = +0.20 R per trade. With 0.50 of costs, net risk 5.50 and net reward 9.50 give 1 : 1.73, and the breakeven win rate rises to 5.5 ÷ 15 = 36.7%; at 40% the expectancy falls to +0.09 R. At 1 : 1 the breakeven win rate is 50%.

Things to know

• A ratio says nothing about how often a trade reaches its exit. Breakeven is a hurdle to compare with your own recorded results, not a forecast.
• Expectancy from a short sample of trades is unreliable; treat it as a rough guide only.
• Contract size, lot step, margin rates and quoting conventions vary between providers and account types. The defaults here are common examples; check your provider’s contract specification and use its figures.

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