Risk/reward compares how much you stand to lose against how much you stand to gain on a trade. A favorable ratio means you don't need a high win rate to come out ahead over many trades.
How the breakeven win rate is calculated
It's the minimum percentage of trades you'd need to win, at this exact risk/reward ratio, just to break even over time — before accounting for fees. A 3:1 reward-to-risk ratio needs only a 25% win rate to break even; a 1:1 ratio needs 50%.
Why risk/reward alone isn't the whole story
A great ratio with an unrealistic take-profit target (one price rarely reaches) isn't actually a good trade. Risk/reward should be considered alongside a realistic estimate of your actual win rate for a given setup.