Trade planning
Trade planning Risk/reward ratio
Enter entry, stop and target — get R:R and the minimum win-rate for break-even. An essential check before every trade.
Why R:R is everything
A 70% win-rate looks great — but at a 1:0.5 R:R you still lose money (expected net result: 70%×0.5 − 30%×1 = +0.05R per trade, quickly negative after costs). Flip it: 40% win-rate at 1:3 R:R gives an expected net of +0.8R — plenty of margin for fees.
Minimum-win-rate rule: you need to win at least (1 / (1 + R:R)) to break even. At 1:1 = 50%. At 1:2 = 33%. At 1:3 = 25%. That's the only thing that matters for long-term profitability — not the emotional hit of "many winners".