Glossary
Win rate
Win rate is the percentage of your trades that close profitable: winning trades divided by total trades. A 55% win rate means 55 of every 100 trades made money. On its own it says nothing about profitability — a high win rate with occasional huge losses can still lose money, which is why it must be read alongside the win/loss ratio.
Win rate is the most quoted and most misused trading statistic. Strategies with a 35% win rate can be highly profitable if winners are much larger than losers, while a 90% win rate strategy can blow up on one oversized loss.
The useful move is pairing win rate with average win/loss ratio to compute expectancy — the average amount you make or lose per trade. That single number tells you whether the system actually has an edge.
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