"Only take trades with 1:3 risk-reward — and even 30% winners make you profitable." It is one of the most popular trading rules. We tested it on crypto market data — and the ratio by itself gives exactly nothing. Here is why.
The math of 1:3
At 1:3 the target is three times further than the stop. To break even you only need to win one trade in four:
Sounds like a gift: 25% is low. But the real question is: how often does a random entry win with the same levels? If also about 25%, the ratio added nothing — you just reshuffled the outcomes.
The test: random entries at 1:3
We entered every third hour (long and short at once, no analysis at all) and checked what happened first within 72 hours: target, stop, or neither. A candle that touched both levels counted as a stop.
| Coin | Stop / target | Target first | Stop first | Neither |
|---|---|---|---|---|
| BTC | 1% / 3% | 21% | 73% | 6.2% |
| BTC | 2% / 6% | 8.8% | 55% | 37% |
| BTC | 3% / 9% | 2.6% | 36% | 61% |
| ETH | 1% / 3% | 23% | 74% | 2.3% |
| ETH | 2% / 6% | 14% | 63% | 23% |
| ETH | 3% / 9% | 8.1% | 48% | 44% |
| SOL | 1% / 3% | 24% | 75% | 1.4% |
| SOL | 2% / 6% | 17% | 66% | 17% |
| SOL | 3% / 9% | 9.3% | 53% | 38% |
| DOGE | 1% / 3% | 24% | 74% | 1.7% |
| DOGE | 2% / 6% | 17% | 65% | 18% |
| DOGE | 3% / 9% | 9.1% | 51% | 40% |
| SUI | 1% / 3% | 25% | 75% | 0.4% |
| SUI | 2% / 6% | 20% | 69% | 10% |
| SUI | 3% / 9% | 14% | 61% | 25% |
| ARB | 1% / 3% | 24% | 76% | 0% |
| ARB | 2% / 6% | 21% | 75% | 4.3% |
| ARB | 3% / 9% | 14% | 66% | 20% |
A random 1:3 entry reaches the target before the stop in about 24% of cases — exactly break-even. After fees and slippage it is a loss. At 1:1 (2% / 2% on Bitcoin) it is 46% vs 46% — the same coin flip, just arranged differently.
The conclusion is unpleasant but important: risk-reward does not create an edge. Only the entry does — if it beats a random one. The ratio only shapes what your results look like: many small wins or rare big ones.
The hidden trap: trades that go nowhere
The wider the stop and target, the more often a trade reaches neither level in time: for 3% / 9% on Bitcoin — in 61% of cases within three days. Money sits in the position and a manual exit decides the result. "1:3" calculations usually ignore this.
So how do you choose stop and target
- Stop from volatility, not from the desired ratio. Beyond the coin's normal move for the trade horizon, not "to make it 1:3". Details — where to put a stop-loss.
- Target inside the real range. If price reaches the target in 3 days in 5% of cases, a 1:5 ratio on paper is worthless. Details — where to set a take-profit.
- Judge the entry itself. Keep a journal: how many of your trades reach the target compared with a random entry at the same levels. If not more — the ratio is not the issue.
The TPR-72 calculator shows the chance of touching both the stop and the target in the time left — so you see what a random entry would get with your levels.
Method. Hourly Binance USDT-M futures candles for 44 coins over the last 230 days. A window starts at every hour; "price reached the level" means at least one candle touched it with its high or low. Longs and shorts are counted together. "Typical altcoin" is the median across all coins. This describes the past market, not a promise about the future.
Check your own trade
The TPR-72 calculator shows a stop beyond the noise, position size from your risk, safe leverage and the chance price reaches your level. Free, no sign-up.
Open the calculator →Telegram botFAQ
Does a 1:3 risk-reward ratio work?
Not by itself. A random entry with 1:3 levels reaches the target before the stop in about 25% of cases — exactly break-even before fees. Profit comes only from an entry that beats a random one.
What win rate do I need at 1:3?
To break even — 25% before fees (1 ÷ (1 + 3)). A bit more with fees and slippage.
What matters more: win rate or risk-reward?
Neither on its own. What matters is how much your entry beats a random one with the same levels. The ratio only changes the shape of results.
How do I choose stop and target correctly?
Stop beyond the coin's normal move for the trade horizon, target inside the real range. Then position size from risk.