Win rate is the percentage of your trades that close green. Win 68 of 170 trades and your win rate is 40%. It's the number every new trader chases, and the one that tells you the least on its own, because it says nothing about how big the wins and the losses are.
What is a good win rate in trading?
There isn't one. A good win rate only exists next to your average winner, because the two have to pay for each other. At 50% your winners need to be as big as your losers just to break even. At 30% they need to be worth about 2.3 times your risk. At 70% you can get away with winners smaller than your losers. Most trend systems live between 30 and 45%, most mean reversion systems between 55 and 70%, and both can be excellent or terrible.
| Win rate | Your average winner has to beat |
|---|---|
| 30% | 2.3R |
| 40% | 1.5R |
| 50% | 1R |
| 60% | 0.7R |
| 70% | 0.45R |
That's the break even line before costs. Anything under it and the math is already against you.
How do you calculate win rate?
Divide your winning trades by your total trades and multiply by 100. Take 170 trades with 68 of them green: 68 / 170 = 0.4, a 40% win rate. Use net results, after slippage and trading costs, or the number ends up looking better than your account does.
Can a high win rate still lose money?
It happens constantly. A system that wins 70% of the time with 0.3R winners and 1R losers is down 0.09R per trade. Seven winners out of ten feels great while the account bleeds. That's why expectancy beats win rate as a headline number... it multiplies frequency by size instead of counting one and ignoring the other.
Win rate vs profit factor
Win rate counts how often. Profit factor weighs how much. A 40% win rate with big winners lands above 1, and a 70% win rate that gives it back in one loser a month can end up below it. Read win rate to know what your equity curve will feel like, and profit factor to know if it pays.
What win rate is actually good for
It's the steadiest number you own. It settles faster than expectancy, and it tells you what to expect. A 40% system will hand you nine losses in a row somewhere inside a couple of hundred trades, and knowing that before it happens is what keeps your discipline intact when it does. Just don't read it off 20 trades, at that size it's luck.
Frequently asked questions
Related terms
- Expectancy — What one average trade is worth to you, after the wins and losses cancel out.
- Overfitting — When a strategy is tuned so tightly to the past that it only works on the past.
- Out of Sample — The data your strategy never saw while you built it, kept back to test if the edge is real.
- Walk Forward — Out of sample testing done over and over, rolling through your whole history instead of one split.