Win rate
Win rate is the share of trades that closed at a profit. On its own it says little, because it ignores how large the wins and losses were.
How Win rate is calculated
Win rate = winning trades / total trades. A rule with a 90 percent win rate that makes 1 dollar on winners and loses 15 dollars on each loser is down on average: 0.9 x 1 - 0.1 x 15 = -0.60 dollars per trade. A rule that wins 30 percent of trades can be up if each winner is large enough.
How it is read
Quoted win rates are easy to raise by taking profit early or by never stopping out. Always read it alongside the average win and average loss.
Common mistakes
- Treating a high win rate as a sign of skill.
- Quoting it from a handful of trades.
- Counting open or unclosed trades as winners.
What Tickfloor tested
Tickfloor's research desk has backtested 678 strategies, net of modelled trading costs. After correcting for the 761 tests run, 0 passed. That does not prove no strategy works. These are historical diagnostics, not validation under Testing Standard v2: the backtest harness predates that standard and has not been re-run to meet it.
- Opening range breakout, 81% win rate (claim test)
- MACD + RSI Confluence (claim test)
- 9/21 EMA Cross (claim test)
Lessons that cover it
- Selling options: a high win rate that hides big losses
- Win rate is not the goal: breakeven stops and partial exits
Related concepts
General information only. It doesn't consider your objectives, finances or needs. Tickfloor holds no financial services licence and never places trades.