Win Rate
Win rate is the percentage of trades that end in profit; on its own it says little, because a 30% win rate can be profitable and a 90% one can lose money.
Win rate is the statistic traders quote most and understand least. It tells you how often you win — not how much. A strategy that wins 9 trades out of 10 can still lose money if the one loss is big enough, while a strategy that wins only 3 out of 10 can be very profitable. This entry shows how to calculate win rate, how to combine it with the size of wins and losses, and how to tell whether yours is good enough.
- Reading time
- 5 min
- Also called
- Hit rate, Win percentage, Strike rate
- Updated
Win rate in plain words
Win rate is winning trades divided by all trades. Win 12 of 30 trades and your win rate is 40%.1
On its own it is half the story.2 What matters is win rate together with how big your average win is compared with your average loss — the reward-to-risk ratio. The two together give your Expectancy: the average result per trade.
How to calculate and use your win rate, step by step
Count your closed trades
Use a decent sample — at least several dozen trades of the same setup. See Sample Size and Statistical Significance.
Decide what counts as a win
Usually any trade that made money after costs. Treat break-even and scratch trades consistently. See Scratch Trade.
Calculate the win rate
Win rate = winning trades ÷ total trades.
Measure average win and loss
Express both in R — multiples of the amount risked — so trades of different sizes are comparable. See R-Multiple.
Compare with the break-even win rate
Break-even win rate = 1 ÷ (1 + reward-to-risk). With wins twice the size of losses, you break even at 33.3%.
Calculate expectancy
Expectancy = win rate × average win − loss rate × average loss. Positive means the strategy makes money on average.
Worked examples
Example 1 — Low win rate, profitable
30% winsA trend follower takes 50 trades: 15 winners averaging +3R and 35 losers at −1R.
| Win rate | 15 ÷ 50 = 30% |
| Break-even win rate at 3 : 1 | 1 ÷ 4 = 25% |
| Expectancy | 0.30 × 3 − 0.70 × 1 = +0.20R per trade |
Seven losers in ten, and still profitable, because the winners are three times the size of the losers.
Example 2 — High win rate, losing
90% winsAnother trader takes 50 trades: 45 small winners averaging +0.3R and 5 losers averaging −3.5R (stops moved or ignored).
| Win rate | 45 ÷ 50 = 90% |
| Expectancy | 0.90 × 0.3 − 0.10 × 3.5 = −0.08R per trade |
| Over 50 trades | ≈ −4R |
A 90% win rate that loses money — a classic result of taking profits early and letting losers run. See Loss Aversion.
Example 3 — Losing streaks at a 40% win rate
StreaksA strategy wins 40% of trades. How often should the trader expect 5 losses in a row?
| Chance a given run of 5 trades is all losses | 0.6⁵ ≈ 7.8% |
| Over a few hundred trades | Five-loss streaks are almost certain |
Lower win rates mean longer losing streaks, even when the strategy is sound. Position size must allow for them. See Drawdown.
The win rate you need depends on your reward-to-risk
Try it: is your win rate good enough?
Enter your win rate, average win and average loss. The calculator shows your expectancy per trade and over a month. It runs in your browser.
| Break-even win rate at 1:2 | 33.3% |
| Expectancy per trade | +0.20R (+$20.00) |
| Expected result over 100 trades | +$2,000.00 |
On average this combination makes money — if the win rate and ratio are real, measured over many trades.
Before commissions, spreads and slippage, which lower the real result. Actual sequences of wins and losses vary widely.
Break-even win rate by reward-to-risk
| Aspect | Break-even win rate |
|---|---|
| 0.5 : 1 | 66.7% |
| 1 : 1 | 50% |
| 1.5 : 1 | 40% |
| 2 : 1 | 33.3% |
| 3 : 1 | 25% |
How traders use win rate
Checking a strategy
Compare the real win rate with the break-even win rate for its reward-to-risk.
Setting expectations
Win rate predicts how long losing streaks will be, which helps you stay with a sound plan.
Spotting problems
A falling win rate on the same setup can signal changed conditions or slipping discipline.
Comparing setups
With a journal, compare win rate and expectancy for each setup.
Advantages and disadvantages
Advantages
- Simple to calculate and understand.
- Predicts how often you will face losses and losing streaks.
- Combined with average win and loss, it gives expectancy.
Disadvantages
- Says nothing about how much you win or lose.
- Easy to inflate by taking small profits and holding losers.
- Unreliable on small samples.
- Often quoted alone in marketing, where it can mislead.
Going deeper
Read as far as you need. Each level builds on the one before it.
A high win rate feels good — that is the trap
Beginner
Most people prefer frequent small wins to rare big ones, even when the rare big wins make more money. Judge strategies by expectancy, not by how often they win.
Win rate and reward-to-risk pull against each other
Intermediate
Moving targets further away usually raises the average win but lowers the win rate; moving them closer does the opposite. The useful question is which combination gives the highest expectancy for your setup.
Sample size
Advanced
With 20 trades, a true 50% win rate can easily show anywhere between about 30% and 70% by chance. Hundreds of trades are needed before small differences in win rate mean much.
Common mistakes
Chasing a high win rate
Cutting winners early raises the win rate and often lowers profits.
Ignoring costs
Fees and slippage turn some small “wins” into losses.
Trusting a short track record
A 75% win rate over 12 trades proves very little.
Believing win-rate marketing
A quoted win rate without average win, average loss and sample size is close to meaningless.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Win rate = winning trades ÷ total trades.
- It says how often you win, not how much.
- Break-even win rate = 1 ÷ (1 + reward-to-risk).
- Expectancy combines win rate with average win and loss — that is the number that matters.
- Lower win rates mean longer losing streaks; size positions for them.
Frequently asked questions
What is a good win rate?
Is a 50% win rate good?
How many trades do I need to know my win rate?
Further learning
- Risk-to-Reward Ratio
The other half of the win-rate equation.
- Trading Journal
Where your real win rate comes from.
- Drawdown
What losing streaks do to an account.
- Position Sizing
Sizing so that streaks are survivable.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- CME Group. The Mathematics of Trading Success (opens in a new tab) Checked .
- CME Group. Misconceptions of Taking Losses (opens in a new tab) Checked .
Read more elsewhere
- Trading Metrics (our sister site): Win Rate (opens in a new tab)
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.