Wick

Win rate is a trap

The Math of an Edge

The most misleading number in trading

A 90% win rate sounds like mastery. It is also exactly what you get by taking a dollar of profit while risking twenty — right almost every time, and broke by the end of the month. Win rate on its own tells you nothing, because it says how OFTEN you were right and nothing about how much being right was worth. Every strategy has to be judged on both numbers at once.

Check yourself

A trader wins 90% of trades. That tells you…

  1. They're profitable
  2. Almost nothing without knowing the size of wins and losses correct
  3. They're skilled

Win 9 trades at +$1 and lose 1 at −$20 and you're down $11 with a 90% win rate. The two numbers only mean something together.

Learn this properly

This term has a full interactive lesson in Wick — the chart, the pattern to tap, and a live practice terminal to try it on. Free to start.

Open the lesson

Related terms