By Volodymyr Kravchenko Updated
Checklist · Planner · Free
Strategy Validation Checklist
Five stages to test a strategy, and where 1:2, 1:3, 1:4 trades come from.
A working strategy is not found, it is tested: write one hypothesis as rules, test it on at least 100 trades with costs, then trade it at tiny risk and log every trade. Decide with expectancy from your own journal. Targets of 1:2, 1:3 and 1:4 need only 33%, 25% and 20% wins to break even, but they bring long losing streaks.
Planner
Where do 1:2, 1:3 and 1:4 sit?
Type the entry and the stop of a trade you are considering. Arithmetic only: no signal, no forecast.
| Target | Take-profit price | Breaks even at win rate | Expectancy at 40% |
|---|---|---|---|
| 1:2 | – | 33.3% | +0.20R per trade |
| 1:3 | – | 25.0% | +0.60R per trade |
| 1:4 | – | 20.0% | +1.00R per trade |
Breaks even before spread and commission, which raise the win rate you need. Use your real win rate from the journal, not a hoped-for one.
How it works
What 1:2, 1:3, 1:4 means Risk 1R, aim for 2R, 3R or 4R.
R is your planned loss (entry to stop). A 1:3 trade risks 1R to make 3R. At 1:2 you break even with 33.3% wins, at 1:3 with 25%, at 1:4 with 20%, before spread and commission. A higher target does not raise your win rate: it lowers the share of trades that get there.
Where such trades come from A tight stop behind structure and a real level ahead.
- Stop: put it where the idea is wrong: behind a swing, a swept level or the zone you trade from. Never at a random distance to fit a ratio.
- Entry: take the entry on a lower timeframe (for example 15M inside a 1H or 4H idea). A tighter stop makes the same move worth more R.
- Target: the next real level: a prior high or low, a liquidity pool, the other side of the range. If a strong level sits closer than 2R, the trade does not qualify.
- Room check: measure the distance to the target before you enter. If the room is smaller than your minimum ratio, skip it.
- Context: trades with the higher-timeframe direction and after a clear reaction at a level tend to run further. Test this on your own history instead of trusting it.
What a 1:3 or 1:4 system feels like Fewer winners, longer losing streaks.
Typical longest losing streak in 100 trades (a simulation of independent trades at a fixed win rate, not a forecast):
| Win rate | Losses in a row (typical) |
|---|---|
| 50% | 6 |
| 40% | 7 |
| 30% | 10 |
| 25% | 12 |
| 20% | 15 |
At 25% wins, 12 losses in a row is normal. At 1% risk that is 12% of the account; on a funded account with a 10% max loss it ends the account. A 1:3 or 1:4 system needs a smaller risk per trade (0.25 to 0.5%) and a plan for the streak.
Build the system in six steps One rule set, one target band, tested together.
- Pick one instrument and one session, and a target band (for example 1:2 to 1:3).
- Write the entry, the stop rule and the target rule so another person could repeat them.
- Collect 50 to 100 past setups from charts with the same rules, including the ones that lost.
- Run the same entries with a fixed 1:2, then 1:3, then 1:4. Compare win rate, expectancy and the longest losing streak.
- Trade the best band on demo or at tiny risk for 1 to 3 months, and log each trade (entry, stop, take profit, exit, news, whether you followed the plan) in the Trading Journal.
- Decide with expectancy from the journal, not from a few good weeks. Change one rule at a time.
Partial exits and trailing stops Optional, and they change your statistics.
Taking part of the position at 1R or moving the stop to break-even can smooth the curve but lowers the average win and changes the break-even win rate. If you use them, journal them as part of the rule set and test them as their own variant. Do not add them in the middle of a losing streak.
Checklist
Five stages, one tick at a time
Open a stage and tick what is true. It stays on this device.
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This tool runs in your browser and needs JavaScript. A translated copy does not run it: open the original English page (globe menu, English, or the Google bar ⋮ and Show original).
Next: log every trade with its entry, stop, take profit and the news in the Trading Journal, size it with the lot size calculator, and check the rule of the day in Marlin Today. Use the expectancy calculator to compare targets, and the Turkey Test to stress your record against a loss you have not had.
Frequently asked questions
Can a strategy be proven to work?
No. A test can show that a rule set had positive expectancy on the trades you tested, after costs. It cannot promise the next 100 trades. That is why the checklist ends with forward testing at small risk and with small steps up.
How many trades are enough?
Under 30 is anecdote. 100 or more is a first honest look, still not certainty. Count trades of the same rule set only: if you change a rule, the count restarts.
Is 1:3 or 1:4 better than 1:2?
Not by itself. A higher target needs a lower win rate to break even (33.3% for 1:2, 25% for 1:3, 20% for 1:4) but brings longer losing streaks and fewer trades that reach the target. Test the same entries at each target and compare the expectancy.
Does the planner give trade ideas?
No. It only does arithmetic on the entry, stop and win rate you type: where a 1:2, 1:3 or 1:4 target sits and what win rate it needs to break even. It never reads a market.
Where is my data?
Ticks stay in this browser (local storage); nothing is sent. The journal note reads the entries you keep in the Trading Journal on the same device.
This content is provided for educational purposes only and is not investment advice. Trading involves risk, and past performance does not guarantee future results. Affiliate relationships may exist. Always conduct your own independent research before making financial decisions.