What Is Win Rate?
Win rate is the percentage of trades (or periods) that are profitable. It does not account for size of wins vs losses.
Quick Answer
Win rate is the percentage of trades (or periods) that are profitable. It does not account for size of wins vs losses.
What Does Win Rate Measure?
Win rate is the proportion of trades that end in a profit. It is easy to interpret but incomplete: a 60% win rate with small wins and large losses can lose money, while a 40% win rate with large wins and small losses can be very profitable. Always consider win rate together with profit factor, average win/loss size, and expectancy.
Win Rate = (Number of Winning Trades / Total Trades) × 100%Typical range: 30–70% common; depends heavily on strategy type
How to Interpret Win Rate
- 1High win rate feels good but can mask negative expectancy
- 2Low win rate can be fine if average win >> average loss
- 3Trend-following strategies often have win rates below 50%
- 4Mean reversion and option selling often have higher win rates
How to Use Win Rate in Backtesting & Portfolio Analysis
Common Mistakes to Avoid
Backtest with Win Rate in VaultCharts
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