Visualize your trade setup with entry, stop loss, and take profit levels. See the required win rate to stay profitable.
Risk/reward ratio (R:R) is the relationship between how much you stand to lose versus how much you stand to gain on a trade. A 1:3 R:R means you risk $1 to potentially make $3. This ratio is fundamental to profitable trading because it determines what win rate you need to be profitable long-term.
Most losing traders focus exclusively on win rate, but R:R ratio is equally important. You can have a 40% win rate and still be profitable if your R:R is 1:3 or better. Conversely, a 60% win rate with a 1:0.5 R:R will bleed your account dry.
The formula is simple:
For example: You buy BTC at $65,000 with a stop loss at $63,000 and take profit at $70,000. Your risk is $2,000 and your reward is $5,000, giving you a 1:2.5 R:R ratio.
This calculator shows you the minimum win rate required to break even at your chosen R:R ratio. The formula is:
Break-Even Win Rate = Risk ÷ (Risk + Reward)
At a 1:2 R:R, you need only 33.3% win rate to break even. At 1:3, you need just 25%. This is why professional traders focus on R:R management — it drastically lowers the performance bar.
TargetHit AI signals maintain a +1.90% expected return per trade across 2,900+ tracked signals by combining a 61.5% win rate with disciplined risk management. The platform's top-performing edges achieve R:R ratios exceeding 1:10 on individual setups.