The win rate you need to break even is 1 ÷ (1 + R), where R is how many times your risk a winning trade makes. At 1R you must win half your trades just to stand still; at 2R, a third; at 3R, a quarter. Whether that is enough to pass an evaluation then depends on a third number, your risk per trade, which decides how many losses in a row the account can take before it reaches its Max Daily Loss or Max Loss.
This post works through all three with real limits. The figures are for a $100K Edge 1 Step, where the Max Daily Loss is 4% ($4,000) and the Max Loss is 7.5% ($7,500), static. The method is the same on every plan, using that plan's own numbers.
What is an R multiple?
R is the amount you lose if a trade hits its stop. It is set by two things you choose before entry: the distance to the stop and the position size. Everything else about the trade is then measured in R.
Take EURUSD, where one standard lot is 100,000 euros and a pip is worth $10 per lot. A 20-pip stop on 2.5 lots risks $500, so on that trade 1R is $500. A target 40 pips away pays $1,000, which is 2R. A target 10 pips away pays $250, which is 0.5R.
Working in R does one useful thing: it separates the shape of a method from the size you trade it at. A method that makes 2R on its winners and loses 1R on its losers has the same shape whether R is $100 or $1,000. The size is a separate decision, and it is the one the loss limits care about.
What win rate do you need to break even?
Over a run of trades you break even when the R you win equals the R you lose. If W is the share of trades that win, winners bring in W × R and losers cost (1 − W) × 1. Set the two equal and solve, and the breakeven win rate is 1 ÷ (1 + R).
- At 0.5R: 1 ÷ 1.5, or 66.7%.
- At 1R: 1 ÷ 2, or 50%.
- At 1.5R: 1 ÷ 2.5, or 40%.
- At 2R: 1 ÷ 3, or 33.3%.
- At 3R: 1 ÷ 4, or 25%.
The list reads as if a wider target is always better, and it is not. A target three times the stop distance is reached less often than one at the same distance as the stop, because price has further to travel and more chances to hit the stop first. Moving the target changes the win rate as well as R. The pair is what matters, and the only way to know your pair is to count it from your own trades.
What is expectancy, and how do you calculate it?
Expectancy is the average result per trade, in R, over many trades. It is the same arithmetic as breakeven, without setting the answer to zero:
Expectancy = (W × R) − (1 − W)
- 45% winners at 1.5R: 0.675 − 0.55 = +0.125R per trade.
- 40% winners at 1.5R: 0.6 − 0.6 = 0. Exactly breakeven, before costs.
- 35% winners at 2R: 0.7 − 0.65 = +0.05R.
- 55% winners at 0.8R: 0.44 − 0.45 = −0.01R. A high win rate that still loses, slowly.
At $500 a trade, +0.125R is $62.50 per trade on average. That is an average, not a forecast. It describes what the figures would produce over a long run if they held, and no one knows their true win rate in advance; a sample of thirty trades can sit well above or below it. Treat expectancy as a test of whether a method can work at all. If it is zero or negative, no position size fixes it.
How does commission change the maths?
On Edge and Instant accounts the commission is $5 per lot round turn on forex, $6 on metals and $6 on energies; indices and stocks are free, and crypto is 0.06% of the trade value. On Prime it is $4, $5 and $6, with crypto at 0.045%. It is part of each trade's result, so it counts toward the profit target and the loss limits like any other cost. The full list is on the symbols page.
Commission is charged per lot, not per dollar of risk, so its weight depends on how tight the stop is. Here are two EURUSD trades on an Edge account, both risking $500 before costs and both aiming for 2R:
- 20-pip stop, 2.5 lots. Commission is $12.50. A win nets $987.50 and a loss costs $512.50, so the real R is 1.93 and the breakeven win rate rises from 33.3% to 34.2%.
- 5-pip stop, 10 lots. Commission is $50. A win nets $950 and a loss costs $550, so the real R is 1.73 and the breakeven win rate rises to 36.7%.
Same risk, same target in R, and the tighter trade needs about 37 winners in every hundred to break even, against about 34 for the wider one. The spread works the same way and adds to it. A short-term method should be tested with both costs included, not on the chart's mid price.
How many losing trades in a row can you take?
This is the number the loss limits actually test. On a $100K Edge 1 Step the Max Daily Loss is $4,000, measured from the day's opening balance, which is the previous day's closing balance at 17:00 New York. Open losses count, and equity touching the floor at any moment ends the account. The Max Loss is $7,500 below the starting balance and never moves. So, with nothing won in between and before costs:
- 0.25% risk ($250): 15 losses in a day stay inside the daily limit and the 16th reaches it. Across days, 29 losses leave $250 of the Max Loss and the 30th reaches it.
- 0.5% risk ($500): 7 losses in a day leave $500; the 8th reaches the daily limit. Across days, 14 losses leave $500 and the 15th reaches the Max Loss.
- 1% risk ($1,000): 3 losses in a day leave $1,000; the 4th reaches the daily limit. Across days, 7 losses leave $500 and the 8th breaches.
- 2% risk ($2,000): 1 loss leaves $2,000; the 2nd reaches the daily limit. Across days, the 4th loss breaches.
| Risk per trade | Reaches the daily limit | Reaches the Max Loss |
|---|---|---|
| 0.25% ($250) | 16th loss | 30th loss |
| 0.5% ($500) | 8th loss | 15th loss |
| 1% ($1,000) | 4th loss | 8th loss |
| 2% ($2,000) | 2nd loss | 4th loss |
Now set that against how often streaks happen. If each trade wins 40% of the time, independently of the last, the chance that any five given trades all lose is 0.6 to the fifth power, about 7.8%. Over a hundred trades, the chance of at least one run of five losses somewhere in them is about 98%, and of a run of eight about 49%. Those are properties of the arithmetic, not of any market. At 1% risk, eight losses in a row reach the Max Loss even when they are spread over several days, and over a hundred trades at that win rate such a run is close to a coin toss. At 0.5%, the Max Loss takes fifteen in a row, which at the same win rate has a chance of under 2% over a hundred trades. The daily limit still needs its own stopping rule, because four losses at 1%, or eight at 0.5%, in one session reach it.
Risk per trade does not change whether a method makes money. It changes how long a losing run the account can live through while the method does its work.
What changes once an account is funded?
Once an Edge or Prime account is funded, one more rule touches risk per trade: Max Floating Loss per Trade. A single open trade may float no further than 2% of the starting balance, or 1.5% on Instant, where it applies from day one. Going over is a warning, not a breach; if the account is in profit at that moment, the profit is reset to the starting balance, and a second warning on the same rule closes the account. A trade risking 1% sits well inside it. A trade risking 2% sits on the line, where slippage on the stop can carry it over.
Instant Pro and Instant Go also limit the combined floating loss of all positions on one symbol to 1.5% of the starting balance. Several trades on the same pair count together: the first breach is a formal warning, and each later one is a strike that pays the next payout cycle at a 10% split.
So what does it take to pass?
On a $100K Edge 1 Step the profit target is $10,000. At 1% risk per trade that is 10R of net profit, to be reached before 7.5R of net loss and without a 4R day. At 0.5% it is 20R before 15R. The ratio is the same; the number of trades is not.
That difference is the heart of it. With a positive expectancy, a smaller risk per trade lowers the chance of reaching the floor before the target, because the edge has more trades over which to show itself before a streak can do damage. The cost is time, and an evaluation has no time limit: Max Trading Days is Unlimited, so taking twice as many trades costs nothing but the trades. With an expectancy of zero or below, smaller size does not help: the odds stay the same at zero and get worse below it. Either way, the stage also needs 3 profitable days of +0.5% ($500 on $100K) before it passes.
The risk-reward calculator does the breakeven and expectancy sums with your own figures, and the position size calculator turns a dollar risk into lots. For the general method of sizing from the rules rather than from a feeling, see position sizing against a loss limit.
Trading leveraged products can lose money, and an evaluation fee is spent whether or not the account passes. These figures illustrate the arithmetic; the rules that bind your account are the ones printed on your plan.