What Is Win Rate?
Win rate is the simplest performance metric: number of winning trades divided by total trades, expressed as a percentage. A 60% win rate means 60 of every 100 trades close profitable.
Win rate by itself tells you almost nothing about profitability. A 90% win-rate system with tiny wins and huge losses is unprofitable. A 30% win-rate trend-following system with large winners is profitable. Always combine win rate with average win and average loss (or R-multiple) to compute expectancy.
Win rate is also subject to sample-size noise. A 70% win rate over 10 trades has a 95% confidence interval roughly 40-90% — almost meaningless statistically. The same 70% rate over 500 trades has a tight CI around 66-74% — that's a real edge. Don't trust any reported win rate without a sample size of at least 100 resolved trades.
Related terms
- Expectancy — The average profit or loss per trade, given win rate and average win/loss size.
- Risk/Reward Ratio — The ratio of potential profit to potential loss on a trade.