🛡️ Risk & Money·beginner

Win Rate

Also called: winning percentage, win percentage

The percentage of your trades that close profitably — one half of the equation that determines profitability.

Win rate is simply the percentage of your trades that end as winners. If you take 100 trades and 55 close in profit, your win rate is 55%. It's an easy number to calculate and an easy number to obsess over — which is why so many beginners chase it instead of focusing on the math that actually matters. Win rate alone tells you nothing. A 90% win rate with 0.5R wins and 5R losses is a losing strategy. A 35% win rate with 5R wins and 1R losses is a wildly profitable strategy. The combination of win rate AND average reward-to-risk determines expectancy, which determines whether you make money. Most professional trend-following strategies have win rates between 35% and 50%. Most professional mean-reversion strategies have win rates between 60% and 75%. Both can be profitable. The trick is matching your win rate to your reward-to-risk so the expectancy works out positive.

Real trade example

Famous trend-follower Ed Seykota has had win rates as low as 30% over multi-year periods — but his winners are so much bigger than his losers that he's compounded billions. The math, not the win rate, makes the trader.

Related terms

Expectancy

advanced

The average dollar (or R) amount you can expect to make per trade over many trades — the math behind whether a strategy works.

R-Multiple

intermediate

A unit that measures profit or loss in multiples of the initial risk taken on a trade — normalizes performance across different position sizes.

Risk-Reward Ratio

beginner

The ratio between how much you risk on a trade and how much you stand to make — the math that makes trading profitable.

Drawdown

intermediate

The peak-to-trough drop in your account equity — a measure of how bad your worst losing streak got.

Kelly Criterion

advanced

A mathematical formula that calculates the optimal bet size based on win rate and reward-to-risk — used to maximize long-term growth.

Martingale

intermediate

A betting system where you double your size after every loss — mathematically destined to blow up the account eventually.

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