What is a good risk/reward ratio in forex?

Most professional traders aim for at least 1:2 R:R, meaning the potential profit is twice the risk. With 1:2 you only need to win 33% of trades to break even.

What is the breakeven win rate for 1:2 R:R?

At 1:2 R:R your breakeven win rate is 33.3%. This means you profit long-term as long as you win more than 1 in 3 trades.

How is expected value calculated?

Expected Value = (Win Rate x Reward) - (Loss Rate x Risk). A positive EV means the strategy is profitable over many trades.

Why is R:R ratio important for prop firm traders?

Prop firms require consistent profitability. A good R:R ensures you can profit even with a win rate below 50%, protecting your challenge account.

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R:R Ratio

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Breakeven Win Rate

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Expected Value

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Profit Factor

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Breakeven Win Rate by R:R

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How it works

The Formula

// Core Formulas

// R:R Ratio
R:R = reward / risk

// Breakeven Win Rate
BE = risk / (risk + reward)

// Expected Value
EV = (win% × reward) - (loss% × risk)

// Examples

// Risk $100, Reward $200 (1:2)
R:R = 200/100 = 2.00
BE = 100/300 = 33.3%

// 50% win rate at 1:2
EV = (0.5 × $200) − (0.5 × $100)
= $100 − $50 = +$50

// Profit Factor = wins / losses
PF = (50% × 200) / (50% × 100) = 2.00

Knowledge

Common Questions

What is a good risk/reward ratio? +

Most professional traders target at least 1:2. At 1:2 you only need to win 33% of trades to break even. Higher R:R lets you profit with a lower win rate.

What is the breakeven win rate for 1:3 R:R? +

At 1:3 R:R the breakeven win rate is 25%. This means you can lose 75% of your trades and still not lose money — assuming consistent R:R.

What does expected value (EV) mean? +

EV shows average profit or loss per trade over time. Positive EV = profitable strategy. EV = (Win% × Reward) − (Loss% × Risk).

Can I be profitable with a win rate below 50%? +

Yes — if your R:R is high enough. With 1:3 R:R you break even at 25% win rate. Many professional traders win 35–45% of trades but remain profitable due to strong R:R.

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