What Is Win Rate? Why a High Number Can Still Lose Money
Win rate is the percentage of trades that close in profit. On its own it says nothing about whether a system makes money — it only matters next to your average win and loss.
Win rate is the share of your trades that close profitable, written as a percentage. If 9 of 20 trades made money, your win rate is 45%.
Win rate = winning trades ÷ total trades × 100
Why a high win rate can still lose money
Win rate only counts how often you win, never how much. A trader who wins 70% of the time but lets the 30% of losers run large can still end up negative. That is why win rate is only half the story — the other half is the size of your average win versus your average loss.
A worked example
Two systems, same 100 trades:
| System | Win rate | Avg win | Avg loss | Result |
|---|---|---|---|---|
| A | 70% | +1R | −3R | (0.70 × 1) − (0.30 × 3) = −0.2R |
| B | 40% | +2R | −1R | (0.40 × 2) − (0.60 × 1) = +0.2R |
System A wins far more often yet loses money. System B "loses" 60% of the time yet is profitable. The win rate alone would have pointed you to the worse system.
How to use it
- Read it with expectancy — expectancy folds win rate together with average win and loss into a single number you can trust.
- Know your style — trend systems often win <50% with big winners; mean-reversion systems win more often with smaller ones. Neither number is "good" or "bad" by itself.
- Watch it over a sample — a win rate from five trades is noise. Look at a few dozen or more before drawing conclusions.
Educational content only. Tracktions is a trade-journaling and analytics tool, not investment advice — we are not SEBI-registered advisers and do not provide trade recommendations, tips, or assurances of returns.