## Play the numbers game

Achieving positive trading results doesn’t always depend on having a high win rate. Think about win ** size**: how much you gain when you’re right (and how little you lose when you’re wrong.)

Let’s use the example of a trader who uses a 3:1 reward-to-risk ratio. He gains 3 in winning trades, and loses 1 when he’s wrong.

At this level of reward-to-risk, the trader can have a win rate of 30% and still be profitable.

To prove it, here are the results for that 3:1 trader who wins 3 out of every 10 trades. Because of the favourable R:R, the trader’s account is *up* even with a win rate that may be considered low.

Trade Number | Result | Gain/Loss |

1 | Loss | -1 |

2 | Loss | -1 |

3 | Loss | -1 |

4 | Loss | -1 |

5 | Loss | -1 |

6 | Loss | -1 |

7 | Loss | -1 |

8 | Win | +3 |

9 | Win | +3 |

10 | Win | +3 |

TOTAL: | +2 |

**The Relationship Between Reward-to-Risk Ratio and Win-Rate**

This table shows the minimum R:R and win-rate needed for breakeven.

Use it as a helpful reminder that you can achieve positive results even with a small number of wins, **as long as they outweigh the impact of losses**.

Reward to Risk (R:R) | 1:1 | 1.5:1 | 2:1 | 2.5:1 | 3:1 | 4:1 | 5:1 | 10:1 | 20:1 |

Breakeven Win Rate | 50% | 40% | 34% | 29% | 25% | 20% | 17% | 10% | 5% |

*Reading the table from left to right:*

If you enter trades with a 1:1 reward-to-risk ratio, your win-rate needs to be better than 50% to be profitable.

If you enter trades with a 1.5:1 reward-to-risk ratio, your win-rate needs to be better than 40% to be profitable.

If you enter trades with a 2:1 reward-to-risk ratio, your win-rate needs to be better than 34% to be profitable.

And so on.