Risk/Reward Ratio — Minimum Win Rate for Profitability

The Math

1:1 ratio (risk 1 to win 1):

• Need 50% win rate to break even (actually >50% to profit)

1:2 ratio (risk 1 to win 2):

• Need only 35% win rate to profit
• Expected value = 0.35×2 − 0.65×1 = +0.35 ✓

1:3 ratio (risk 1 to win 3):

• Need only 25% win rate to profit
• Expected value = 0.25×3 − 0.75×1 = +0.0 (even), +0.25 at 30% win

How to Calculate

Entry: 70k Stop: 68k (risk 2k) Target: 74k (reward 4k) Ratio: 4k/2k = 1:2 ✓ (good, only need 35% win)

Only Trade Ratio ≥ 1:2

Reject trade if ratio < 1:2. Period. This filters 70% of setups (good—fewer bad trades).

Real Example

Setup A:

• Entry 70k, Stop 69k (1% risk), Target 71k (1% reward)
• Ratio 1:1 → need 50% win
• If you achieve 50% win → +0% profit (waste time)

Setup B:

• Entry 70k, Stop 67k (3% risk), Target 80k (14% reward)
• Ratio 1:4.67 → need 18% win
• If you achieve 40% win → +0.4×14 − 0.6×3 = +4.6% profit ✓

fastbot Ratio Calculator

Set entry/stop/target → fastbot calculates ratio and win% needed.

👉 Use fastbot risk/reward — trade only good odds.