A 70% win rate sounds excellent. It can still lose money.
Whether a strategy or a signal channel makes money depends on two numbers together: how often it wins and how big the wins are compared with the losses. The break-even win rate joins them into one figure: the win rate you need just to not lose.
The formula
Break-even win rate = average loss ÷ (average loss + average win)
If you risk $10 to make $20, you need to win 10 ÷ (10 + 20) = 33% of trades to break even. Win more than that and you make money. Win less and you lose it.
You can write the same thing with the reward-to-risk ratio (R), where R = average win ÷ average loss:
Break-even win rate = 1 ÷ (1 + R)
Break-even win rate table
| Reward : risk | Example (risk $10) | Break-even win rate |
|---|---|---|
| 0.25 : 1 | win $2.50 | 80% |
| 0.33 : 1 | win $3.30 | 75% |
| 0.5 : 1 | win $5 | 67% |
| 0.67 : 1 | win $6.70 | 60% |
| 1 : 1 | win $10 | 50% |
| 1.5 : 1 | win $15 | 40% |
| 2 : 1 | win $20 | 33% |
| 3 : 1 | win $30 | 25% |
| 4 : 1 | win $40 | 20% |
Read it both ways. A strategy that wins only 35% of the time is fine at 2 : 1. A channel that wins 70% of the time is losing money if its wins are a third the size of its losses.
Costs push the number up
Spreads, commissions and slippage come off every win and add to every loss. That moves the break-even point higher than the table shows.
Say you risk $10 to make $10, and each trade costs $1 in spread and commission. Your real win is $9 and your real loss is $11, so the break-even win rate is 11 ÷ (11 + 9) = 55%, not 50%.
The smaller the targets, the more costs matter. A $1 cost barely matters on a $100 target, but it eats a big share of a $4 one.
A real example: Telegram gold signals
In our study of 1,189 Telegram signals, we measured the gold signals that came complete, with an entry, a stop and a first target:
- The median stop was $11 from entry.
- The median first target (TP1) was $4 from entry.
- TP1 was closer than the stop in 74% of them.
If you close the whole position at TP1, that's a reward-to-risk of about 0.36, and a break-even win rate of 11 ÷ (11 + 4) = 73%. Add $0.30 of spread to each trade and it rises to about 75%.
So before you follow a channel like this, ask one question: does TP1 get hit at least three times out of four? If nobody can show you that, the arithmetic is against you.
Do partial closes and breakeven fix it?
Many channels expect you to close part of the trade at TP1, move the stop to breakeven, and let the rest run to TP2 and TP3. Does that help? It depends on how often trades actually run.
Take the same gold signal on a 0.30 lot, split into three 0.10 lot parts. The stop is $11 away, TP1 is $4, and say TP2 is $10 and TP3 is $20. Ignoring costs:
| What happens | Result |
|---|---|
| Stop hit before TP1 | −$330 |
| TP1 hit, rest stopped at breakeven | +$40 |
| TP1 and TP2 hit, rest stopped at breakeven | +$140 |
| All three targets hit | +$340 |
| For comparison: close everything at TP1 | +$120 |
Now the break-even point depends on what usually happens after TP1:
- If most trades stall after TP1 and get stopped at breakeven, your average win is close to $40 against a $330 loss. You'd need TP1 to be hit almost 90% of the time. That's worse than closing everything at TP1.
- If half of the TP1 trades stop at breakeven, a quarter reach TP2 and a quarter reach TP3, the average win is $140. Break-even is 330 ÷ (330 + 140), about 70%, only a little better than closing everything at TP1.
Partial closes and breakeven reduce how often a trade turns from a winner into a loser. They don't rescue a signal whose stop is nearly three times its first target. Only trades that regularly reach the later targets do that. Our guide to multiple take-profits and trailing stops covers how to set the splits.
How to find your real numbers
The table tells you what you need. Your journal tells you what you actually get.
- Log every trade, including the losers and the trades you closed early. A trading journal that records copied trades automatically makes this painless.
- Work out three numbers: win rate, average win and average loss. From them, expectancy is: win rate × average win − loss rate × average loss. If it's above zero, the strategy makes money on average.
- Wait for enough trades. After 30 trades, a measured 70% win rate could really be anywhere from about 54% to 86%. After 100 trades, the range narrows to roughly 61% to 79%. Don't trust a channel's numbers, or your own, on a small sample.
- Ask what counts as a win. Many channels count a trade as a win once TP1 is hit, even if the rest of the position closed at breakeven or the trade later lost.
For more metrics that matter, see 7 trading metrics that improve your win rate. To compare channels on every signal they posted, not just the ones they celebrated, see the channel grades.
Quick checks before you follow a signal channel
- Compare TP1 with the stop. If TP1 is about a third of the stop, the channel needs a hit rate of around 75%.
- Check how often it sends a stop at all. Without a stop, no break-even maths applies. See what to do when a signal has no stop loss.
- Size each trade to the stop. The win rate tells you whether the edge exists. Position size decides whether you survive the losing streaks in between. Our lot size calculator does the maths.
Know your numbers on every channel
TradeJournal Pro copies Telegram signals to MT4 and MT5 and journals every trade it copies, so your win rate, average win and average loss per channel are always up to date. Start with the free plan: one account, one channel, no card.
Not financial advice. Trading carries risk. Past results, including win rates, do not guarantee future performance.