What Is Win Rate in Trading? Why It Can Be Misleading
Win rate is the share of winning trades out of all trades. If 6 out of 10 trades closed in the green, the win rate is 60%.
How to calculate it
Win rate = winning trades ÷ all trades × 100%. It's worth calculating over a large number of trades — at least a few dozen. Over 5–10 trades, the number is random. The easiest place to get the data is your trading journal.
Why it can be misleading
On its own, win rate says nothing about money. What matters is how much you make on an average winning trade and lose on an average losing one.
| Trader A | Trader B | |
|---|---|---|
| Win rate | 80% | 40% |
| Average gain | $10 | $30 |
| Average loss | $50 | $10 |
| Result over 10 trades | 8×10 − 2×50 = −$20 | 4×30 − 6×10 = +$60 |
In this example, the trader with the lower win rate comes out ahead. That's why win rate is only looked at together with the risk/reward ratio.
Be wary of advertising
- A high win rate is easy to get if you don't use stops and sit through losses — until one loss wipes out everything.
- Numbers without the number of trades and the time period mean nothing.
- Good past results don't mean the same results in the future.
More on this in tracking your losses.
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- Win rate is the share of winning trades.
- Without risk/reward, it says nothing about the result.
- A high win rate without stops is a sign of hidden risk.
Frequently asked questions
What is a normal win rate?
There's no normal number. A system with a 35% win rate can be profitable, while one with 80% can lose money.
How do I raise my win rate?
Don't chase it. It's better to cut out trades that break your rules and track your average result in R.
What is expectancy?
The average result of one trade: win rate × average gain − share of losing trades × average loss. It matters more than win rate.
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