Skip to main content

Win Rate

In short

Percentage of trades that were profitable

If you made 100 trades and 60 of them made money, your win rate is 60%. But here's the trick — a 40% win rate can still make you rich if your winners are much bigger than your losers. Win rate alone doesn't tell the full story.

Win rate measures the proportion of profitable trades out of total trades executed. While intuitive, it is only meaningful when combined with the average win/loss ratio (reward-to-risk). A strategy with a 30% win rate can be highly profitable if average wins are 3x average losses (trend-following), while a 90% win rate strategy can lose money if the occasional loss wipes out many small gains (selling options).

Formula

Win Rate = Profitable Trades / Total Trades × 100%

Thresholds

>60%
High win rate
40-60%
Typical range
<40%
Low (check reward:risk)

Related concepts

  • Profit Factor — If all your winning trades added up to £3,000 and all your losing trades added up to £2,000, your profit factor is 1.5. It means for every £1 you lost, you made £1.50. Above 1.0 = making money. Below 1.0 = losing money. Simple as that.
  • Sharpe Ratio — Sharpe ratio measures how much return you get for every unit of risk you take. A Sharpe of 1.0 means for every 1% of risk, you earn 1% return above the risk-free rate. Higher is better.
  • Total Trades — This is simply how many times the strategy bought or sold something during the test. More trades means the strategy is more active (like a day trader), fewer means it's more patient (like a buy-and-hold investor). There's no 'right' number — it depends on the strategy.