What is the Risk-Reward Ratio (RR)?

Risk-Reward Ratio (RR) is average win ÷ average loss (absolute) — the reward you aim for versus the risk you take per trade.

RR = average win ÷ | average loss |

Relationship with win rate (break-even)

• RR = 1.0 → profitable above a 50% win rate.
• RR = 2.0 → profitable above a 33% win rate.
• RR = 0.5 (small wins, big losses) → needs a 67%+ win rate.

Break-even win rate = 1 ÷ (1 + RR). An EA with average loss > average win (RR<1) depends on a high win rate and turns red quickly if that win rate slips.

Read together with

win rate, expectancy and PF.