The minimum win rate required to avoid losing money, determined by your risk-to-reward ratio.
Break-even win rate is calculated as 1 / (1 + R). With a 2R average reward, you need to win just 33.3% of trades to break even. With a 1:1 ratio, you need 50%. This formula shows exactly how win rate and R are mathematically linked.
Understanding your break-even win rate sets the foundation for realistic strategy evaluation. If your system averages 2R on winners, you know that anything above a 33% win rate is profitable. This frees you from the psychological trap of needing to win most trades.
Your strategy averages 3R on winners. Break-even win rate = 1 / (1 + 3) = 25%. If your actual win rate is 35%, you have a 10% cushion above break-even, which translates to a solid positive expectancy.
Higher R ratios require lower win rates to break even. At 3R, you only need to win 25% of your trades.