Win rate
Definition · Level 9 · Risk & portfolio
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The share of your trades that make money. On its own it says nothing about profit: the size of the wins against the losses matters just as much.
Example
27 winners out of 60 trades → 45%.
Where Tradecraft teaches it
Level 9 · Risk & portfolio, in the lesson “Edge & expectancy”: Measure edge as expectancy, see why a 40% win rate can still win, and find the win rate a payoff needs.
Related terms
- ExpectancyAverage profit per trade: win% × average win − loss% × average loss.
- Payoff ratioAverage winning trade divided by average losing trade, in absolute terms; the b in the Kelly formula.
- 1RThe dollar amount at risk on a trade (entry-to-stop distance × size), used as the unit for measuring every result.
- AlphaReturn earned above what the asset’s market exposure predicts: Rp − [Rf + β(Rm − Rf)].
- AnchoringFixating on an arbitrary reference price, such as your entry or a prior high, when judging what something is worth now.
- Annualizing volatilityTurning a daily volatility into a yearly one by multiplying by the square root of the number of trading days: σ annual = σ daily × √252 ≈ σ daily ×…