The textbook formula, and the one you need
Without costs:
break-even win rate = 1 ÷ (1 + R) × 100
With costs, where c is the round-trip cost expressed in units of your risk:
break-even win rate = (1 + c) ÷ (1 + R) × 100
The second is the one that decides whether a strategy is viable. Almost every calculator in this niche returns only the first.
| Ratio | Textbook | With 0.1R cost |
|---|---|---|
| 1 : 1 | 50% | 55% |
| 1 : 1.5 | 40% | 44% |
| 1 : 2 | 33.3% | 36.7% |
| 1 : 3 | 25% | 27.5% |
| 1 : 5 | 16.7% | 18.3% |
How to work out your cost in R
This is the only slightly awkward step, and it takes one division:
c = round-trip cost ÷ stop distance
Both in the same units. A one-pip spread with a ten-pip stop is 0.1. The same one-pip spread with a hundred-pip stop is 0.01 — ten times less significant, on identical costs.
That single ratio explains a great deal about which strategies survive. A swing trader with a 200-pip stop pays essentially nothing in relative terms. A scalper with an eight-pip stop and a 1.5-pip round trip is carrying c ≈ 0.19, which pushes a 1:1 setup from a 50% break-even to nearly 60%. The strategy did not get worse; the costs were always there, and they were never counted.
Why break-even is the wrong target
The number this page returns is a floor. Hitting it exactly means working for nothing — the same result as not trading, with more screen time and more risk of a mistake.
The useful reading is the gap between this threshold and your actual win rate over a meaningful sample. That gap is the edge. A 1:2 setup needing 36.7% and delivering 45% has real room; the same setup delivering 38% is inside the noise of any sample under a few hundred trades, and calling it profitable is a statement the data cannot support. The expectancy calculator shows how wide that uncertainty actually is.
What the threshold cannot tell you
It assumes every win is the full target and every loss is exactly one R. Real records are messier: partial exits, trades closed early, stops that filled worse than placed. Each of those moves the effective ratio away from the planned one, usually downward.
So use the threshold to judge the plan, and use realised R-multiples to judge what actually happened. When a strategy with a comfortable margin still loses money, the gap between those two is almost always where it went.