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Breakeven win rate

The hit rate at which a given payoff ratio produces exactly zero expectancy, and therefore the bar any strategy must clear.

The win rate needed to break evenA falling curve: the more a winning trade pays relative to the amount risked, the smaller the share of trades that must win to break even.BREAKEVEN WIN RATE0%20%40%60%80%1:11:21:31:41:5REWARD-TO-RISK RATIO1:1 needs 50%1:2 needs 33.3%1:3 needs 25%breakeven win rate = 1 ÷ (1 + reward-to-risk)above the curve, wins more than cover losses
The win rate needed to break even. How often a method must win just to stay level, for each reward-to-risk ratio. At 1:1 half the trades must win, at 1:2 a third, and at 1:3 a quarter, because each win covers more losses.

Breakeven win rate = 1 / (1 + payoff ratio). At a payoff of 3, you need 25%. At 2, 33.3%. At 1.5, 40%. At 1, 50%. At 0.5, 66.7%.

Two uses. Before trading a system, compute the bar and ask honestly whether the setup clears it; a 3:1 target needing only 25% accuracy is easier to defend than a 0.8:1 scalp needing 56%. After trading it, compare realised win rate against the bar to see how much room the edge actually has - a system needing 40% and delivering 43% is real but fragile, and one bad month of execution erases it.

Add costs before judging. With a slippage-budget worth 0.1R per trade, a nominal 2:1 payoff is really about 1.8:1, which lifts the breakeven bar from 33.3% to 35.7%. Small on paper, decisive over hundreds of trades.

Related: payoff-ratio, win-rate, expectancy-per-trade, slippage-budget

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