Win rate: how much you need to make money
Seven trades out of ten are green — yet the account is down month after month. This happens more often than you'd think: win rate without a second number says almost nothing. Here is what share of winning trades you actually need and why 40% is often better than 70%.
Win rate alone decides nothing
Win rate is the share of winning trades. To know whether a system makes money, you also need to know how much a winning trade brings on average relative to a losing one. This ratio is conveniently measured in R — units of risk: if you risked 100 and made 250, the trade returned 2.5R.
The break-even win rate formula
| Risk : reward | Required win rate |
|---|---|
| 1 : 0.5 | 66.7% |
| 1 : 1 | 50.0% |
| 1 : 1.5 | 40.0% |
| 1 : 2 | 33.3% |
| 1 : 3 | 25.0% |
This is the point where the system breaks even before fees. With fees the required share is higher: with a 2R win and a fee of 5% of the risk per trade, break-even is already 35%, not 33.3%.
The more you take on a winning trade, the less often you need to win: at 1:2, 33.3% is enough.
Why a high win rate can be a warning sign
A win rate of 75–85% often comes not from precise entries but from two habits: profit is taken at the first move, while a losing trade is held until it “comes back”. Nine small wins and one big loss give a pretty win share and a negative result. Check whether your losing trades are held longer than your winning ones.
Why a low win rate can be normal
Trend strategies often run at a 30–40% win rate: many short stops and rare trades that return 3–5R. Such a system is psychologically hard to run — streaks of five or six losses in a row are normal for it. That's why it matters to know your math in advance and not break the system after the next streak.
Losing streaks: what to expect at your win rate
The lower the win rate, the longer the usual streaks of stops. The probability of n losses in a row is (1 − win rate) to the power of n. At a 40% win rate, the chance of five losses in a row from a given point is about 8%, but over a hundred trades such a streak will almost certainly happen at least once.
| Win rate | 3 losses in a row | 5 in a row | 8 in a row |
|---|---|---|---|
| 60% | 6.4% | 1.0% | 0.07% |
| 40% | 21.6% | 7.8% | 1.7% |
| 30% | 34.3% | 16.8% | 5.8% |
The probability is for a streak starting at a specific trade. The practical conclusion: risk per trade is chosen so that eight to ten losses in a row don't knock you out of the game. At 1% risk that's about 8–10% of the deposit, at 5% — about 40%.
Risk per trade is chosen so that 8–10 losses in a row don't knock you out of the game.
What to look at together with win rate
- Average R of winning and losing trades — whether you cut profits short and let losses go beyond the plan.
- Expectancy — how much one trade brings on average. That is what turns into a result.
- Profit factor — how many times the money made exceeds the money lost.
- The longest losing streak — so that your risk per trade can withstand it.
Calculate your own
Enter your reward-to-risk ratio and win rate in the required win rate calculator — it shows the break-even point with fees and your expectancy in R. And from real trades, Ordo Trade calculates all of it: win rate, average R, expectancy and the R distribution for every pair and setup — after fees and funding.
In short: frequently asked questions
What win rate do you need to make money?
It depends on the reward-to-risk ratio: at 1:1 you need more than 50%, at 1:2 more than 33.3%, at 1:3 more than 25%, plus a margin for fees.
Is a 70% win rate good?
Only if the average win isn't much smaller than the average loss. With a win of 50 and a loss of 150, a system with a 70% win rate loses money.
How do I calculate the break-even win rate?
Divide one by the sum of one and the average reward-to-risk ratio: at 2R that's 1 ÷ 3 = 33.3%.
