Risk
What is Win rate?
By the verify.trading team · Last reviewed · How we write
Win rate is the share of your trades that close in profit. It says nothing about how big the wins and losses are.
Key points
- Wins divided by total trades.
- Meaningless without average win and loss.
- Needs a decent sample size.
Win rate explained
A strategy with a 40% win rate can be profitable if its winners are larger than its losers, and a 70% win rate can lose money if the losers are much bigger. That is why win rate and risk to reward are always judged together.
A win rate is only meaningful over a large enough sample of trades, and a journal is the way to measure it honestly.
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