Basics
Win Rate
The percentage of closed trades that ended profitable. It only means something when read together with the size of wins versus losses.
win rate = winning trades / total trades × 100%
The trap
Win rate is the most misread number in trading. A 90% win rate strategy can lose money (many small wins punctuated by rare huge losses, the classic short-volatility shape). A 35% win rate strategy can be excellent (trend-following with small losses and occasional large wins).
What decides profitability is expectancy, which combines win rate with the average win and loss size:
expectancy per trade = (win rate × avg win) − (loss rate × avg loss)
A system winning 40% of the time with wins twice the size of losses has expectancy 0.4×2R − 0.6×1R = +0.2R per trade. Solidly positive, despite losing more often than it wins.
What to look at instead
Read win rate alongside the risk-reward ratio and the equity curve. An AlphaProve tearsheet presents them together for exactly this reason: either number alone is an invitation to fool yourself.
On AlphaProve
A win rate measured over 20 trades is barely evidence, so the tearsheet carries a trade-count significance gate: an analytics card that flags whether you have enough closed trades for the ratio to mean anything beyond luck. Checking it before you trust a high percentage is the quickest guard against the small-sample version of the trap above, where a few trades can produce almost any win rate you like.