None is better on its own. With 39,886 random entries per combination, the win rate matched the theory almost exactly: 1:1 won 50% of the time, 1:2 a third and 1:3 a quarter. Before costs, every combination averaged between −$0.47 and +$0.41 per trade, practically zero; after commission and slippage, all of them lost between −$1.47 and −$2.52. The ratio only decides whether you win often and small or rarely and big: the edge has to come from the entry.
We measured 1,813 Micro Nasdaq sessions (2019-2026). Every 15 minutes from 9:45 am to 3:00 pm New York time we entered long or short at random, with stops of 5 to 40 points and targets from half to three times the stop. A trade that hits neither exits at 4:00 pm.
Every ratio, measured
| Stop | Target | Wins | Theory | Before costs | After costs | Win rate needed with costs |
|---|---|---|---|---|---|---|
| 5 pts ($10) | 2.5 pts (1:0.5) | 65.3% | 66.7% | −$0.21 | −$2.09 | 78.7% |
| 5 pts ($10) | 5 pts (1:1) | 50.0% | 50.0% | $0.00 | −$1.95 | 59.5% |
| 5 pts ($10) | 10 pts (1:2) | 32.6% | 33.3% | −$0.20 | −$2.24 | 40.0% |
| 5 pts ($10) | 15 pts (1:3) | 24.3% | 25.0% | −$0.25 | −$2.33 | 30.1% |
| 10 pts ($20) | 5 pts (1:0.5) | 67.3% | 66.7% | $0.17 | −$1.69 | 72.8% |
| 10 pts ($20) | 10 pts (1:1) | 49.9% | 50.0% | −$0.05 | −$2.01 | 54.8% |
| 10 pts ($20) | 20 pts (1:2) | 32.8% | 33.3% | −$0.21 | −$2.25 | 36.7% |
| 10 pts ($20) | 30 pts (1:3) | 24.1% | 25.0% | −$0.38 | −$2.46 | 27.6% |
| 20 pts ($40) | 10 pts (1:0.5) | 67.3% | 66.7% | $0.31 | −$1.56 | 69.8% |
| 20 pts ($40) | 20 pts (1:1) | 50.1% | 50.0% | $0.13 | −$1.83 | 52.4% |
| 20 pts ($40) | 40 pts (1:2) | 32.1% | 33.3% | −$0.47 | −$2.52 | 35.0% |
| 20 pts ($40) | 60 pts (1:3) | 22.9% | 25.0% | −$0.29 | −$2.38 | 26.3% |
| 40 pts ($80) | 20 pts (1:0.5) | 67.9% | 66.7% | $0.41 | −$1.47 | 68.2% |
| 40 pts ($80) | 40 pts (1:1) | 50.0% | 50.0% | −$0.08 | −$2.07 | 51.2% |
| 40 pts ($80) | 80 pts (1:2) | 29.8% | 33.3% | −$0.39 | −$2.48 | 34.2% |
| 40 pts ($80) | 120 pts (1:3) | 18.5% | 25.0% | −$0.01 | −$2.15 | 25.6% |
1 MNQ ($2 per point). Wins: targets / (targets + stops), without the trades that reach the close (that's why the wide 40-point rows fall below the theory: the target often runs out of day). Costs: $1.20 commission, 1 tick on entry and 1 tick on stop or close exits (the target is a limit order). The last column is the win rate you need just to break even with those costs.
What the numbers say
- The win rate is set by the ratio, not by you. A random entry with a 1:2 target wins about a third of the time. To beat that you need a real edge in the entry, not a different ratio.
- Costs are what's left. Before costs every row is close to zero; after costs every row loses. That's what trading without an edge looks like.
- Small stops pay more in costs. With a 5-point stop and a 1:2 target, you need to win 6.7% more often than chance just to cover costs; with a 40-point stop, only 0.8% more. Scalping needs a much bigger edge.
- Wide targets mean long losing streaks. With a 1:3 ratio you lose about 3 of every 4 trades: check how long your streaks will be with the losing streak calculator before a prop firm's daily loss limit finds out for you.
So which ratio should you use?
- The one that fits your entry and your nerves. If your edge is real, it shows up in your results at any ratio; if it isn't, no ratio will save it.
- Check your break-even win rate with the break-even calculator, and compare it with your real win rate over enough trades (how many?).
- With big ratios, many trades last all day: with a 40-point stop and a 1:3 target, 32% of them reached 4:00 pm without touching either level.
With 5-point stops, 8% of the 1:2 trades had the stop and target in the same minute. We used the usual path of a bar (an up bar goes open, low, high, close; a down bar, open, high, low, close). Each entry is long or short at random: entering both at once would make the 1:1 win rate exactly 50% by construction.
Educational content based on our own experience. Not investment advice. Firm rules change: check them on each firm's website. This article contains no affiliate links.