Risk Reward Ratio in Crypto: The Break-Even Win Rate You Need

The risk reward ratio compares how far your target is from entry with how far your stop is. Divide the first by the second. A target 2,000 points away with a stop 1,000 away is 1:2. The break-even win rate is the share of trades you must win to come out flat at that ratio, and it equals 1 ÷ (1 + R). At 1:2 it is 33.3%. These are the two numbers to know before every trade, and this guide shows how to work out both for the risk reward ratio in crypto, including what fees do to them.

The risk reward ratio in crypto: what it is

Every trade has a distance to the stop, which is what you lose if you are wrong, and a distance to the target, which is what you make if you are right. The ratio is the second divided by the first.

• Risk = |entry − stop|
• Reward = |target − entry|
• Ratio R = reward ÷ risk, written 1 : R

Take a long on Bitcoin at 83,000 with a stop at 82,000 and a target at 85,000. Risk is 1,000, reward is 2,000, so R = 2 and the trade is 1:2. The same maths works for shorts, with the stop above entry. The risk reward calculator does this for any entry, stop and target and uses the same formulas as this post.

R is also a unit. A loss at the stop is −1R, a win at a 1:2 target is +2R. Counting results in R makes trades of different size comparable, and it is how the figures below are labelled.

The break-even win rate

A ratio on its own says nothing about whether a trade plan works. It has to be read together with how often you win. The break-even win rate puts the two together:

Why this formula? Suppose you take many identical trades and win a share p of them. Each win makes R, each loss costs 1. You break even when p × R = (1 − p) × 1, which rearranges to p = 1 ÷ (1 + R). At R = 2 that is 1 ÷ 3 = 33.3%. At R = 1 it is 50%. At R = 3 it is 25%.

The curve falls fast at first and then flattens. Going from 1:1 to 1:2 cuts the win rate you need by about 17 percentage points. Going from 1:5 to 1:6 cuts it by about 2. That is why chasing ever larger ratios has diminishing returns, and why a far target that price rarely reaches does not help you. The win rate you actually achieve drops as the target moves out.

The numbers for common ratios

A ratio below 1 is not wrong, but it is demanding. At 1:0.5 you need to win two trades in three just to break even. At 1:3 you can lose three out of four and still be flat. Neither tells you whether the plan is good. For that you need your own win rate, from your own logged trades.

What a win rate means at 1:2

Once you know the break-even point, you can see what each win rate is worth. The expected result per trade, in R, is win rate × reward − (1 − win rate) × 1. At 1:2:

At a 30% win rate the plan loses 0.10R per trade on average. At 33.3% it is flat. At 40% it makes 0.20R per trade, and at 50% it makes 0.50R. These are illustrations of the arithmetic, not claims about any strategy, and we do not publish a win rate for BiasNex setups.

The edge is also thin near break-even. A plan at 35% wins makes 0.05R per trade before fees, and fees can take that away. That brings us to the part most calculators skip.

How fees move the break-even point

Fees add to your loss at the stop and reduce your profit at the target, so the effective ratio is lower than the drawn one. Our calculator charges the fee on the entry value, on both the entry and the exit.

We use a fee of 0.05% per side as an example. It is not a quote for any exchange: check the fee schedule of your own exchange and tier before relying on it. On an entry of 83,000 that is 41.5 per side, 83 round trip. Compare two long trades, both drawn at 1:2:

• Wide stop. Entry 83,000, stop 82,000, target 85,000. Risk is 1,000 (1.20% of entry). After fees, risk becomes 1,083 and reward 1,917, a ratio of 1.77. The break-even win rate rises from 33.3% to 36.1%.
• Tight stop. Entry 83,000, stop 82,750, target 83,500. Risk is 250 (0.30% of entry). After fees, risk becomes 333 and reward 417, a ratio of 1.25. The break-even win rate rises from 33.3% to 44.4%.

The fee is the same in both. What changes is how large it is next to the stop distance. This is the practical reason scalping with very tight stops is harder than it looks. Slippage comes on top. The position size calculator lets you add a fee, so the loss you plan for at the stop includes it.

How it looks on a real chart

Here is a 1:2 short drawn on real BTCUSDT hourly candles from Friday 9 October 2026. The prices come from the chart: the entry is 83,250, the stop is 83,550, just above the high of the 11:00 UTC candle (83,528.98), and the target is 82,650.

Risk is 300 points, or 0.36% of entry. Reward is 600, or 0.72%. The ratio is 1:2 and the break-even win rate is 33.3%. In this case no candle reached the stop, and the low of the 13:00 UTC candle, 82,492, went through the target, so the trade would have made +2R.

We chose this trade after seeing the day, so it says nothing about how often such a setup works. It is here to show how the three prices on a chart turn into risk, reward and a ratio. A real stop would also depend on where your idea is wrong, for example above a swept high. For how that works, see liquidity sweep examples and structure shift example. If your stop is a trigger order, mark price vs last price explains which price sets it off.

A short routine before every trade

1. Mark where the idea is wrong. That is the stop.
2. Mark a target at a level price has a reasonable chance of reaching, such as the previous day high or low.
3. Calculate R and the break-even win rate. Add your real fee.
4. Compare it with your own logged win rate for this kind of setup. If you do not have one, treat the trade as a test, not a plan.
5. Size the position from the stop distance and the share of the account you are willing to lose, not the other way round.

More Learn ICT guides are in the Learn ICT hub.

Common mistakes

• Moving the target out to improve the ratio. A 1:5 target that price reaches one time in ten is worse than a 1:2 target it reaches one time in two. Set the target where the chart supports it.
• Moving the stop closer for the same reason. A tighter stop raises R on paper and gets hit more often by ordinary noise. As the fees example shows, it also raises the break-even point.
• Ignoring fees and slippage. In the example above, break-even on the tight stop is 11 points higher than the clean formula says.
• Using the ratio without a win rate. 1:3 sounds safe. If you win one trade in five, it loses money.
• Treating the ratio as a forecast. It describes the plan, not the outcome. Price does not owe you the target.
• Quoting a win rate from a few trades. Ten trades is noise. Log at least a few dozen before you trust the number.

FAQ

What is a good risk reward ratio in crypto?

There is no universal number. A ratio only means something with the win rate you actually achieve. At 1:2 you need to win about one trade in three to break even before fees, at 1:1 one in two. Pick targets that price has a reasonable chance of reaching, then check the ratio after fees.

How do I calculate the risk reward ratio?

Divide the distance from entry to target by the distance from entry to stop. Entry 83,000, stop 82,000 and target 85,000 give 2,000 ÷ 1,000 = 2, so the ratio is 1:2. For a short, the stop is above entry and the target below, and the maths is the same.

What is the break-even win rate?

It is the share of trades you must win so the wins and losses cancel out. The formula is 1 ÷ (1 + R), where R is reward divided by risk. At 1:2 it is 33.3%, at 1:3 it is 25%, and at 1:1 it is 50%. It ignores fees and slippage, so the real requirement is higher.

Do fees change the risk reward ratio?

Yes. Fees add to the loss at the stop and take from the profit at the target. In our example, a 0.05% fee per side lowers a 1:2 ratio to 1:1.77 on a wide stop and to 1:1.25 on a tight one. The tighter the stop, the bigger the effect.