Win rate or risk/reward: which matters more (and the win rate you need)

A 70% win rate is useless if each loss wipes out three wins. And 35% can be very profitable if each win is worth three losses. Win rate and risk/reward (R:R) always go together.

The breakeven win rate

Breakeven win rate = 1 ÷ (1 + R:R). Above that percentage you make money; below it, you lose (before commissions):

• R:R 1:1 → 50%
• R:R 1.5:1 → 40%
• R:R 2:1 → 33.3%
• R:R 3:1 → 25%
• R:R 0.5:1 → 66.7%

Neither one: what counts is what you actually achieve

• The R:R that matters is the realised one, not the one in your take profit: if you close early, your real R:R drops.
• A high R:R usually brings a lower win rate and longer losing streaks. You need to be able to sit through them.
• A high win rate with a low R:R is fragile: one big loss (moving the stop) wipes out weeks.

Losing streaks are normal

With a 40% win rate, the chance of hitting 6 losses in a row at some point in 100 trades is very high. It doesn't mean the strategy stopped working: it's statistics. That's why it pays to risk little per trade (0.5–1%) and judge a strategy over blocks of 50–100 trades, not last week.

Run your own numbers

The risk/reward calculator shows the breakeven win rate of any trade, and the challenge odds one simulates your streaks. In the Katanith journal you see your real win rate and R:R per strategy: demo.