Risk Management

Win Rate

The percentage of trades that are profitable — misleading on its own, since it ignores the relative size of wins versus losses.

Win rate is the percentage of trades that are profitable. On its own, it’s a misleading measure of strategy quality — a high win rate strategy can still be a net loser if average losses significantly exceed average wins, and a lower win rate strategy can be profitable if wins are large relative to losses.

See the loss-recovery math and why win rate alone misleads in Why Risk Management Matters More Than Strategy.