With a 1:2.50 ratio, you only need to win 28.6% of trades to break even.
= 1 / (1 + 2.50) = 28.6%
Note: This calculator provides theoretical risk:reward ratios based on your chosen levels. Actual results may differ due to slippage, gaps, and spread costs. Past performance is not indicative of future results.
Understanding risk:reward ratios in spread betting
The risk:reward ratio is one of the most important concepts in spread betting. It compares the potential loss (risk) to the potential gain (reward) on a trade, helping you decide whether a trade is worth taking before you commit any capital.
A ratio of 1:2 means you are risking one unit to potentially gain two. This is significant because it means you can be wrong on more than half your trades and still be profitable — with a 1:2 ratio, a 34% win rate is enough to break even, and anything above that generates profit.
How to set your levels: your stop loss should sit where your trade thesis is invalidated — typically beyond a key support or resistance level. Your take profit should be at a realistic target, such as the next significant support/resistance zone or a measured move.