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Win Rate × Risk-Reward Profitability Matrix

Every combination of win rate and R:R — see exactly which setups are profitable before you trade them

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How to use this matrix

Find your win rate (left column) and your average R:R ratio (top row). The cell shows your profit factor — gross profit divided by gross loss. A profit factor above 1.0 means your strategy is profitable over a large sample. Below 1.0 means losing money even if it feels like you're "winning" trades.

Formula: Profit Factor = (Win Rate × Avg RR) ÷ (1 − Win Rate) Break-Even Win Rate = 1 ÷ (1 + Avg RR)

Example: 50% win rate at 2:1 R:R → PF = (0.5 × 2) ÷ (0.5) = 2.00

PF < 1.0 — Losing
PF 1.0–1.25 — Marginal
PF 1.25–1.75 — Good edge
PF 1.75–2.5 — Strong edge
PF > 2.5 — Elite edge
Win Rate ↓ / R:R → 0.5:10.75:11:11.25:11.5:12:12.5:13:13.5:14:15:1
Key insight: A 40% win rate at 2:1 R:R (PF 1.33) beats a 60% win rate at 0.75:1 R:R (PF 1.13). Win rate alone tells you nothing. Profit factor is the number that matters.

Prop firm minimum: Most prop firms (FTMO, E8, True Forex Funds) want to see a profit factor of 1.5+ before considering funding. Anything below 1.25 after 100+ trades is a strategy problem, not a discipline problem.

Transaction costs: Subtract approximately 0.1–0.15 from your profit factor to account for spread. A real-world PF of 1.3 often looks like 1.15–1.2 after costs on M5 scalping.

Break-Even Win Rates by R:R

R:R RatioBreak-Even Win RateMeaning
0.5:166.7%Must win 2 in 3 just to break even — very hard
0.75:157.1%Still above 50% needed — spread eats into this
1:150.0%The psychological trap — feels safe, spread kills it
1.5:140.0%Achievable for most strategies — realistic target
2:133.3%Only 1 in 3 trades need to win — very forgiving
3:125.0%Highly forgiving — 3 in 4 can lose and still profit
5:116.7%1 in 6 wins suffices — but finding 5:1 setups is hard
Backtesting tip: Run 100+ trades on FXAbsolute's free bar replay tool to measure your actual win rate and R:R. The tool calculates profit factor automatically. Know your numbers before going live.