Win Rate
Risk Management
What it means
The percentage of your trades that are winners. It is one half of profitability -- the other half is how big wins are versus losses.
Example
If you take 100 trades and 45 are winners, your win rate is 45%. Whether that is profitable depends on your average win and average loss sizes.
Mistake beginners make
Beginners chase a high win rate by taking tiny profits and big losses, ending up profitable on 80% of trades but still losing money overall. Win rate without payoff is meaningless.
Related terms
- Expectancy — The average amount you expect to make per trade, accounting for both wins and losses. A po…
- Losing Streak — A run of consecutive losing trades. Even with a 50% win rate, streaks of 6-8 losses in a r…