What is Win Rate?
Win rate is the percentage of your total trades that are profitable, calculated as winning trades divided by total trades. It's one component of a complete trading performance picture.
Win Rate Explained
Win rate alone is misleading. A trader with a 30% win rate can be highly profitable if their average winner is much larger than their average loser. Conversely, a 70% win rate can be unprofitable if losses are much larger than gains. What matters is expectancy: (win rate × average win) - (loss rate × average loss). Many new traders obsess over win rate when they should focus on risk-reward ratio.
Real-World Example
Trader A wins 40% of trades with average win $500 and average loss $150. Trader B wins 65% of trades with average win $100 and average loss $200. Trader A's expectancy is $170/trade vs Trader B's -$5/trade. Trader A is profitable despite the lower win rate.
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