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Break-even win rate calculator
"My win rate is only 40%" is the most commonly misdiagnosed sentence in retail trading. At 2R, 40% is comfortably profitable. At 0.5R, 60% loses money. The win rate is half a number, and this is the other half.
The formula
Break-even win rate = 1 ÷ (1 + R)
With a round-trip cost c, in R: (1 + c) ÷ (1 + R)
Expectancy per trade = (win% × R) − ((1 − win%) × 1)
- R — the average win divided by the average loss. Measured, not planned.
- c — commission plus spread for one round trip, expressed as a fraction of your 1R. A $7 cost on a $100 risk is 0.07.
- Losses are taken as exactly 1R. If your losses average more than that — stops slipping, or being widened — the real line is higher than any of these figures.
The first line is where the counter-intuitive part lives. It has no free parameters, nothing to argue with, and it settles the win-rate question completely.
Worked: the table worth memorising
| Reward-to-risk | Break-even | with 0.05R costs | with 0.10R costs | with 0.20R costs | Reading |
|---|---|---|---|---|---|
| 0.25R | 80.0% | 84.0% | 88.0% | 96.0% | Needs a win rate most strategies never reach. |
| 0.50R | 66.7% | 70.0% | 73.3% | 80.0% | Needs a win rate most strategies never reach. |
| 0.75R | 57.1% | 60.0% | 62.9% | 68.6% | Costs alone can decide whether this is profitable. |
| 1.00R | 50.0% | 52.5% | 55.0% | 60.0% | Costs alone can decide whether this is profitable. |
| 1.25R | 44.4% | 46.7% | 48.9% | 53.3% | Losing more often than you win is fine here. |
| 1.50R | 40.0% | 42.0% | 44.0% | 48.0% | Losing more often than you win is fine here. |
| 2.00R | 33.3% | 35.0% | 36.7% | 40.0% | Losing more often than you win is fine here. |
| 2.50R | 28.6% | 30.0% | 31.4% | 34.3% | Losing more often than you win is fine here. |
| 3.00R | 25.0% | 26.3% | 27.5% | 30.0% | Losing more often than you win is fine here. |
| 4.00R | 20.0% | 21.0% | 22.0% | 24.0% | Easy on paper; the win rate falls as the target moves out. |
| 5.00R | 16.7% | 17.5% | 18.3% | 20.0% | Easy on paper; the win rate falls as the target moves out. |
| 10.00R | 9.1% | 9.5% | 10.0% | 10.9% | Easy on paper; the win rate falls as the target moves out. |
Look at the top rows. At 0.25R with realistic costs the break-even line is above 100% — the strategy loses money even if every single trade wins. That is not a rhetorical flourish; it is what the arithmetic says, and scalping systems with tight targets and ordinary spreads live in exactly that region.
Expectancy, by win rate and reward-to-risk
Per trade, in R, losses taken at 1R and no costs. Green makes money; red does not.
| Win rate | 0.5R | 1.0R | 1.5R | 2.0R | 3.0R |
|---|---|---|---|---|---|
| 20% | -0.70 | -0.60 | -0.50 | -0.40 | -0.20 |
| 30% | -0.55 | -0.40 | -0.25 | -0.10 | +0.20 |
| 35% | -0.48 | -0.30 | -0.13 | +0.05 | +0.40 |
| 40% | -0.40 | -0.20 | +0.00 | +0.20 | +0.60 |
| 50% | -0.25 | 0.00 | +0.25 | +0.50 | +1.00 |
| 60% | -0.10 | +0.20 | +0.50 | +0.80 | +1.40 |
| 70% | +0.05 | +0.40 | +0.75 | +1.10 | +1.80 |
What the number is actually for: escaping the high-win-rate trap
A high win rate feels like competence in a way that a good reward-to-risk does not. Most days end green. Most trades are closed at a profit. The account is being ground down by a small number of large losses that arrive too far apart to feel connected to the wins.
It is also the pattern most vulnerable to a single bad day: a strategy taking 0.4R winners with an occasional 4R loss needs ten wins to pay for each loss, and a run of two losses erases three weeks. The equity curve looks like a staircase with a lift shaft in it — and the staircase is what gets remembered.
The diagnosis is not in the win rate and not in the average trade. It is in comparing your average win to your average loss, which is payoff ratio, and in checking that the largest loss is not several times the typical one.
Every figure on this page assumes losses average exactly 1R. That assumption is doing a lot of work, and for most accounts it is optimistic — a stop that slipped, or that was widened in the moment, makes a −1.4R out of a −1R and moves the break-even line up invisibly. The only way to know your real average loss in R is to measure it.
Questions
Is a high win rate a good thing?
Only in combination with something else. Win rate on its own is not a measure of skill or of profitability — it is one of two numbers, and the other one is how big the wins are relative to the losses. A 70% win rate at 0.25R loses money; a 35% win rate at 3R makes it comfortably. Any presentation of a win rate without its reward-to-risk is missing the half that decides the outcome.
What is a realistic reward-to-risk?
Whatever your exits actually achieve, which is usually lower than the plan. Targets get taken early, trailing stops catch retracements, and a plan of 3R commonly delivers an average closer to 1.5R once the managed trades are included. That is not a failure; it is the difference between the plan and the execution, and it is measurable. Your statement holds the real figure.
How much do costs move the line?
More than most traders expect, and disproportionately at tight reward-to-risk. If a round trip costs 0.1R, a 1R plan needs 55% rather than 50% to break even — a five-point shift that will consume the entire edge of most systems. At 3R the same cost moves the line by less than three points. Cheap-to-trade and wide targets are the same defence against costs, approached from two directions.
Does this work for a strategy with several targets?
Use the average reward-to-risk actually realised across all exits, not the reward-to-risk of the furthest target. A plan that scales out at 1R, 2R and 3R has an average well below 3R, and using 3R here would tell you a comfortable number that has nothing to do with the strategy. This is another case where the measured figure and the intended one are different, and only one of them pays.
Both halves of the number, from your own trades
TapeSheet reads your win rate and your average win-to-loss ratio off the statement and prints them next to each other, because neither means anything alone. It also shows your largest loss beside your average one — which is where the high-win-rate trap becomes visible. Free, no signup, and the file never leaves your device.
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