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Win rate

The share of trades that made money. High on its own means little, since many small wins and one catastrophic loss still lose.

Updated 2026-09-03

Win rate is the percentage of trades that made money. It is intuitive, it feels like the most important thing, and it is close to meaningless on its own.

A strategy can win 90 percent of the time and lose money, if the tenth trade gives back more than the other nine made. A strategy can win 30 percent of the time and compound handsomely, if the winners are large and the losers are cut small. Trend following as a category typically wins well under half its trades, and that is a design feature, not a flaw.

A very high win rate should raise suspicion rather than confidence. It usually means the strategy holds losers hoping they come back, which converts a series of small losses into an occasional catastrophic one, and moves the risk out of the win rate where it is visible and into max drawdown where it is not. Read it with profit factor or not at all.

See also

  • Profit factor — How many dollars the winners made for every dollar the losers cost. Below 1.0 the strategy loses money regardless of how often it is right.
  • Backtest — Running a set of rules over history to see what they would have done. It shows what did happen, never what will, and it flatters any rule tuned on the same data.

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Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.

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