Example
18 wins and 27 losses is a 40% win rate.
In practice
Win rate is one half of a strategy's results; the average size of wins and losses is the other. Together they give expectancy. With winners twice the size of losers, a win rate of 40% is comfortably profitable.
Traders track it by setup and by market in their journal to see which of their trades are worth taking.
What to watch for
Chasing a high win rate usually means taking small profits and letting losses run, which looks good until one large loss wipes out many wins. Over a few dozen trades the figure is mostly luck.
Related terms
3 terms- ExpectancyWhat a strategy makes per trade on average: win rate × average win − loss rate × average loss.
- Breakeven win rateThe win rate at which a given reward to risk neither makes nor loses money: 1 ÷ (1 + R:R).
- Risk to rewardRRThe distance to your target compared with the distance to your stop, decided before entry.