BRVX Glossary · Risk-reward ratio · Updated September 25, 2026
The risk-reward ratio compares how much a trade stands to lose if the stop-loss is hit with how much it stands to gain if the target is reached. A 1:3 ratio means risking one unit to make three.
The formula
Risk |Entry − Stop| Reward |Target − Entry| Break-even win rate 1 ÷ (1 + R)
At 1:3, a strategy breaks even winning just one trade in four, before fees.
How it works
- Stop Defines risk
- Target Defines reward
- Ratio Reward ÷ risk
Win rate and ratio together
- 1:1 needs to win more than 50% of trades to profit.
- 1:2 needs more than 33%.
- 1:3 needs more than 25%.
- Fees and funding raise every one of these thresholds.
A worked example
A long at 100 with a stop at 97 and a target at 109 risks 3 to make 9: a 1:3 ratio. Whether it is a good trade still depends on how likely the target is compared with the stop.
On BRVX
A BRVX position can carry a take-profit and a stop-loss, which fix both sides of the ratio when the trade opens. Fees on BRVX are charged on opening and closing — 0.2% of the position round trip on BTC/USDT — and belong on the risk side.
Questions about Risk-reward ratio
What is a good risk-reward ratio?
Many traders look for at least 1:2, but the right ratio depends on the win rate.
Is a higher ratio always better?
No. Distant targets are hit less often; the ratio and win rate must be judged together.
Should fees be included?
Yes. Round-trip fees reduce the reward and add to the risk.
Risk-reward ratio: next steps on BRVX
Risk-reward ratio on SUI/USDT: 0.1% a round trip in fees, 0.0046% per hour funding on a long, about 1.1 USDT a day per 1,000 USDT.
Read next: Stop-loss, Take-profit and Drawdown.
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