Win rate vs expectancy
Win rate is the most quoted — and most misleading — trading stat. On its own it tells you almost nothing about whether you make money. What matters is expectancy: win rate combined with how big your wins are versus your losses.
The trap: high win rate, negative edge
Win 90% of the time making $10, lose 10% of the time losing $200:
(0.90 × $10) − (0.10 × $200) = $9 − $20 = −$11 per trade. A 90% win rate that bleeds money.
The flip: low win rate, real edge
Win 35% making $300, lose 65% losing $100:
(0.35 × $300) − (0.65 × $100) = $105 − $65 = +$40 per trade. A 35% win rate that prints.
The lesson: stop chasing win rate. Track expectancy by setup, keep a healthy risk/reward ratio, and let winners run.
Calculate your expectancy:
Trade expectancy calculatorFrequently asked questions
Is a high win rate good?
Not by itself. A 90% win rate loses money if the occasional loss is bigger than all the small wins combined. Win rate only matters alongside your average win-to-loss size — together they form expectancy.
What's more important, win rate or risk/reward?
Neither alone — it's their combination, expectancy. A low win rate with big winners can beat a high win rate with tiny ones. Optimize expectancy, not either input in isolation.
Can a 30% win rate be profitable?
Yes. If your average winner is 3× your average loser, a 30% win rate has positive expectancy. Trend-following strategies often win less than half the time and still make money.
How do I track expectancy?
A journal that computes win rate, average win, average loss, and expectancy by setup shows you which strategies actually have an edge — and which just feel good.