The ratio is half the answer
A 3:1 setup is not "better" than a 1:1 setup in any absolute sense — it is a different bet with a different hit rate attached. What matters is whether your actual win rate clears the bar the ratio sets, and that bar is exactly 1 ÷ (1 + ratio).
- 1 : 1 — needs to win 50% of the time
- 2 : 1 — needs 33.3%
- 3 : 1 — needs 25%
- 0.5 : 1 — needs 66.7%
This is why scalping a half-R target is harder than it looks: two thirds of those trades have to work, forever, before fees. And it is why a trader who wins a quarter of the time can still be profitable at 3:1 — provided the targets actually get hit rather than being decorative.
Where the number lies to you
The ratio assumes both outcomes are equally reachable, and they are not. A target three times further away than your stop is not three times as likely to be reached — it is meaningfully less likely, because price has more time and more chances to hit the near level first. Treat a high ratio as a hurdle you have made harder to clear, not as free money.
Questions people ask
Does the position size change the ratio?
No, and that is the point. The ratio and the break-even win rate depend only on the three prices. Size decides how much money is on the line — that is the position size calculator's job, and the two are meant to be used together.
Should fees be in here?
They are not, and they push the required win rate up slightly — a round trip at 0.1% per side eats about 0.2% of the position regardless of which way it goes. On a wide setup that is noise; on a scalp it can be the difference between an edge and a hobby.
What ratio should I be aiming for?
There is no correct answer, only a consistent one. Pick the ratio your strategy actually produces, measure the win rate you actually achieve, and check that the second number clears the first. Most accounts fail on the second measurement, not the first.