Win rate
The win rate is the percentage of winning trades out of all trades of a strategy, to be interpreted together with the average win / average loss ratio.
The win rate is computed simply: number of winning trades divided by the total number of trades, expressed as a percentage. It is the most intuitive backtest metric, and the most misleading one when read in isolation. A strategy that wins 90% of the time can still lose money if its rare losses are huge; conversely, a trend follower winning 35% of the time can be very profitable if its gains are several times larger than its losses.
Reading the win rate with the win/loss ratio
Profitability depends on the pair win rate × average win / average loss ratio. The breakeven formula is worth knowing: with a 1-to-2 risk/reward ratio, a win rate of about 34% is enough to break even; with a 1-to-1 ratio, you need more than 50%. In Screener.Trading, a screener's backtest displays the win rate alongside the profit factor and maximum drawdown, precisely so that a strategy is never judged on this single figure.
A win rate computed over few trades is not significant: 8 wins out of 10 trades may be pure luck. Always check the sample size too.
Keep exploring
- FeatureThe backtesting tool built into your screenersBacktests built from your screeners: entries, exits, fees and full metrics to judge a strategy on numbers instead of gut feeling.
- FeatureThe multi-indicator, multi-timeframe screenerCombine technical indicators, timeframes and comparison operators to keep only the assets that match your strategy exactly.
- GlossaryProfit factorThe profit factor is the ratio of a strategy's gross profits to its gross losses: above 1, the strategy is profitable.
- GlossaryRisk/reward ratioThe risk/reward ratio compares a trade's targeted gain with its accepted loss, and together with the win rate determines whether a strategy has positive expectancy.
- GlossaryEquity curveThe equity curve plots the evolution of a strategy's capital trade after trade, and its shape often says more than any aggregate metric.
- GuideBacktesting a trading strategy, step by stepBefore risking a cent, replay your strategy on historical data: backtest setup, reading the key metrics, and the traps of over-optimization.