win rate
The share of trades that end in profit; it says nothing alone without the size of wins and losses.
Win rate is the percentage of completed trades that ended with a profit. Calculate it by dividing winning trades by all completed trades and multiplying by 100.
Win rate alone does not show whether a plan made money. A few large losses can outweigh many small wins, while larger wins can offset a lower win rate. Include costs and look at enough trades; fewer than 30 is too few to tell much.
Past results describe a sample and do not guarantee future outcomes.
Example
Marc reviews 40 practice trades on made-up Spark Coin. Sixteen ended with a profit and 24 did not. Win rate = 16 ÷ 40 × 100 = 40%.
This says four in ten trades were profitable in that sample. It does not say whether the account gained money: the sizes of each win and loss and all costs are still needed.
Common mistakes
- Calling a high win rate profitable without checking win and loss sizes.
- Excluding fees or spread from trade results.
- Drawing conclusions from fewer than 30 trades.
- Most people who trade lose money.
Learn it in the course
- Win rate and reward-to-risk · A plan that wins three trades in ten can make money, and one that wins eight in ten can lose: see how the size of wins and losses decides, and find the break-even win rate.
- Fear, greed, hope and revenge trading · Name the four feelings that move a hand to the button and see how loss aversion turns a 60% win rate into a loss.
- Expectancy: the average trade · Compute what an average trade earns after costs from a real trade list, and see why ten trades can tell the opposite story from forty.
- Why most beginners lose · Losing accounts are mostly explained by three ordinary habits, not bad luck: paying costs on too many trades, bets too big for the account and dropping the plan mid-trade. The numbers are in the journal.
- A losing streak is normal · See how long a losing run can last in a sound plan, and why one trade or ten trades prove nothing either way.