Even money is a hard way to get paid

A 1:1 risk reward is a weak setup for a whole trade. You risk a dollar to make a dollar. So you need to win half your trades just to stand still.

That sounds manageable until you add costs. Commissions and the option's spread come out of every round trip. They shrink each winner and enlarge each loser. Your break-even win rate creeps above 50 percent.

There's also no slack for bad days. At even money, a run of four losers needs four winners just to get back to zero. Any trade you exit early, or any stop that slips, drags the whole record under water. A higher ratio gives you room to be wrong more often and still come out ahead.

The formula is short. Break-even win rate equals risk divided by risk plus reward. At 1:1 that's 1 divided by 2, or 50 percent. At two to one it's 1 divided by 3, about 33 percent.

Now add costs. Say you risk $100 to make $100, and each round trip costs $4. A winner nets $96 and a loser costs $104. Break-even becomes 104 divided by 200, which is 52 percent.

Run the same costs at two to one. Risk $100 to make $200. A winner nets $196, a loser costs $104. Break-even is 104 divided by 300, about 35 percent. The same costs barely move it.

That gap is the whole case for a higher ratio. Costs hit both trades equally in dollars. At 1:1 they eat a bigger share of a smaller winner. Before you take a trade, check what it pays, then check what it pays after costs.

Before you enter, measure the trade on the chart. Your stop goes beyond the level that proves you wrong. Your target goes at the next level in your direction. If the distance to the target isn't at least twice the distance to the stop, skip it.

Use the long or short position tool on your chart. Put its stop on the stop level and its target on the target level. The ratio it shows has to read two or more.

Because both ends come from the chart, there's a latest price at which the trade still works. Take the stop-to-target distance, divide by three, and add it to the stop for a long. Above that price, the setup is gone. Waiting for the pullback toward your level is often what gets you under it.

Selling part of a position at one to one doesn't make it a 1:1 trade. The trade was chosen because the full target paid two to one or better. The partial is a management choice inside that trade.

Here's the arithmetic. You take half off at 1R and hold the rest for a 3R target. If the target fills, the trade averages 0.5 plus 1.5, which is 2R. If the second half gets stopped at your original stop, you end at zero, not minus one.

Sell the partial into strength, on a strong candle in your favour. Then trail what's left behind structure.

The trap is when the partial becomes the whole exit. Close everything at 1R every time and your average winner shrinks to one unit of risk. You're back at a 50 percent break-even, with costs on top.

Some scalpers say 1:1 works because they win far more than half their trades. That can be true. It's a claim about your record, so only your record can settle it.

Check three numbers from your own trades: win rate, average winner and average loser. If your average loser is bigger than your average winner, your real ratio is worse than 1:1 already. A high win rate can hide that for months.

Watch the drawdowns too. A high win rate with deep drawdowns often means there's no real stop. Losers get held until they hurt. A low win rate with shallow drawdowns points the other way: winners get cut before they pay.

If your numbers clear break-even with room to spare after costs, you've earned the argument. Until then, two to one is the safer floor.

Do this before you click buy, not after the fill.