Profit and Loss Ratio vs Win Rate: How many times do you really need to win to avoid losing money?
Have you ever calculated what win rate you need for each trade to avoid losses?
If you are still in the stage of 'thinking you have decent luck', you really should take a look at these two charts, which show the minimum win rate you need to achieve breakeven under different profit and loss ratios.
For example:
• If your profit and loss ratio is 1:1, meaning your profits and losses are equal, then you need at least a 50% win rate to break even.
• If your profit and loss ratio is 2:1 (for example, making $200 and losing only $100), then you only need a 33.3% win rate to break even.
• In a more extreme example: with a profit and loss ratio of 3:1, you can win even if you are right less than 30%, and your account will steadily grow.
🔥 How to apply this to your trading?
Many people mistakenly believe that they need to rely on 'high win rates' to make money; in fact, a truly stable and profitable trading system relies on: a large profit and loss ratio and quick stop-losses.
👉 So, stop worrying about 'whether this time will be a win', and make every loss small and swift, while letting every profit run, that is the right path.
✅ Remember this phrase:
'As long as you lose small and win big, even if you are often wrong, you can still win in the end.'
