VaultCharts
performance Metric

What Is Win Rate?

Win rate is the percentage of trades (or periods) that are profitable. It does not account for size of wins vs losses.

Quick Answer

Win rate is the percentage of trades (or periods) that are profitable. It does not account for size of wins vs losses.

What Does Win Rate Measure?

Win rate is the proportion of trades that end in a profit. It is easy to interpret but incomplete: a 60% win rate with small wins and large losses can lose money, while a 40% win rate with large wins and small losses can be very profitable. Always consider win rate together with profit factor, average win/loss size, and expectancy.

Formula:
Win Rate = (Number of Winning Trades / Total Trades) × 100%

Typical range: 30–70% common; depends heavily on strategy type

How to Interpret Win Rate

  • 1High win rate feels good but can mask negative expectancy
  • 2Low win rate can be fine if average win >> average loss
  • 3Trend-following strategies often have win rates below 50%
  • 4Mean reversion and option selling often have higher win rates

How to Use Win Rate in Backtesting & Portfolio Analysis

Quick sanity check on strategy behavior
Set expectations for how often you “win” vs “lose”
Combine with profit factor for full picture
Compare with expectancy and risk per trade

Common Mistakes to Avoid

Optimizing for win rate and hurting expectancy
Ignoring trade size and payoff structure
Comparing win rates across different trade definitions (e.g. bars vs closed trades)
Assuming high win rate means low risk

Backtest with Win Rate in VaultCharts

VaultCharts includes backtesting with built-in and custom strategies. Analyze Win Rate, Sharpe ratio, max drawdown, and more—all with your data stored locally.

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