Win rate only matters next to the size of each win.

Win rate only matters next to the size of each win.

There is no single good win rate in trading: a good win rate is one that is higher than the break-even rate for your reward-to-risk ratio. If your average winner is twice the size of your average loser, you break even at a 33.3% win rate, so 45% is very good. If your average winner is only half your average loser, you need 66.7% just to break even, so even 65% loses money. Most profitable traders who use stop-losses and targets win somewhere between 35% and 60% of their trades.

Win rate and reward-to-risk work as a pair

Your win rate is the share of trades that make money. Your reward-to-risk ratio (often written R:R) is the size of your average winner divided by your average loser. Neither number means anything on its own. Together they tell you whether a strategy makes money before costs.

The break-even win rate is easy to work out: divide 1 by (1 + R), where R is your reward-to-risk ratio. With R = 1 (win and lose the same amount), you need 50%. With R = 3, you need only 25%.

Win rate needed just to break evenBy average reward-to-risk ratio, before costs66.7%1 : 0.550%1 : 140%1 : 1.533.3%1 : 225%1 : 3Source: FX Recap arithmetic, 1 ÷ (1 + R)fxrecap.com
The bigger your winners compared with your losers, the less often you need to be right.

The number that really matters: expectancy

Expectancy is the average amount you make or lose per trade, measured in units of risk (R). The formula is:

Expectancy = (win rate × average win) − (loss rate × average loss)

A positive number means the strategy makes money over many trades; a negative one means it loses, however good it feels. Here are five traders, all measured in R, where 1R is the amount risked on each trade:

TraderWin rateAverage winExpectancy per tradeOver 100 trades
A: the scalper70%0.3R0.7 × 0.3 − 0.3 × 1 = −0.09R−9R
B: the coin-flipper50%1R0.5 × 1 − 0.5 × 1 = 00R
C: the sniper60%1R0.6 × 1 − 0.4 × 1 = +0.20R+20R
D: the trend follower40%2R0.4 × 2 − 0.6 × 1 = +0.20R+20R
E: the runner30%3R0.3 × 3 − 0.7 × 1 = +0.20R+20R

Trader A wins seven trades out of ten and still loses money, because the three losers are each more than three times bigger than the average winner. Traders C, D and E have very different win rates, from 30% to 60%, and exactly the same expectancy. With 1% risk per trade, +20R over 100 trades is roughly a 20% gain before costs.

All of these figures are before costs. Spreads and commissions reduce every winner and enlarge every loser, which pushes the real break-even win rate a little higher. The smaller your targets, the bigger the effect.

What win rates are typical for different styles?

Different trading styles naturally produce different win rates. The ranges below are broad rules of thumb from how each style is built, not official statistics:

  • Trend following: often 30% to 45%. Many small losses while waiting for a trend, a few large winners that pay for them.
  • Swing trading with fixed targets: often 40% to 55%, with targets of 1.5R to 2R.
  • Range and mean-reversion trading: often 55% to 70%, with smaller targets near the other side of the range.
  • Scalping: often 60% or more, but with small wins that costs eat into heavily.

None of these is better than the others. The question is always whether the win rate and the average win and loss fit together into a positive expectancy.

Losing streaks: the hidden side of win rate

Win rate also decides how long your losing runs will be, and losing runs are what break most traders psychologically. Even a sound strategy produces long streaks of losses purely by chance. We calculated the chance of seeing at least one run of six or more losses in a row within 100 trades, assuming each trade is independent:

Chance of 6+ losses in a row within 100 tradesBy win rate, each trade independent99%30% win rate87%40% win rate55%50% win rate21%60% win rate5%70% win rateSource: FX Recap calculation, exact probability over 100 tradesfxrecap.com
With a 40% win rate, six losses in a row will very likely happen at some point in 100 trades.

This is why a trend-following trader with a 40% win rate must be ready for long losing runs. With 1% risk, six losses cost about 6% of the account: unpleasant but survivable. With 5% risk, the same normal streak costs more than a quarter of the account. The lower your win rate, the smaller your risk per trade needs to be.

Before you trade a strategy live, work out its likely worst losing streak and multiply it by your risk per trade. If the answer would make you abandon the plan, cut the risk until it would not.

How to measure your own win rate properly

  1. Use enough trades. Ten trades tell you almost nothing. Aim for at least 50, ideally 100 or more, taken with the same rules.
  2. Record every trade. Include the ones you would rather forget. A journal that skips losers will always show a great win rate.
  3. Measure in R, not dollars. Write down each result as a multiple of the amount risked, so changes in position size do not distort the picture.
  4. Count costs. Use the actual closed results from your platform, after spreads, commission and swaps.
  5. Separate strategies. A 50% overall win rate can hide one strategy at 65% and another at 35%.
Illustrative case, not a real client

A trader proudly reported a 72% win rate over three months. When he exported his history and measured each trade in R, his average win was 0.4R and his average loss was 1.3R, because he moved stops further away when trades went against him. His expectancy was 0.72 × 0.4 − 0.28 × 1.3 = −0.08R per trade. He was winning most trades and slowly losing money. Keeping his original stops lowered his win rate to 58% but turned his expectancy positive.

So what is a good win rate?

  • With 1:1 trades: anything consistently above 50% after costs, so 55% or more is good.
  • With 1:2 trades: anything above 33.3%, so 40% to 45% is good.
  • With 1:3 trades: anything above 25%, so 30% to 35% is good.
  • Very high win rates (75%+): treat with suspicion until you check the size of the losers.

For a beginner, a sensible target is a win rate of 40% to 55% with winners at least 1.5 times the size of losers. Combine that with a fixed risk per trade, such as the limits in the 3-5-7 rule, and size each position with the position size calculator.

Forex and CFD trading carries a high risk of losing money quickly because of leverage. A positive expectancy in the past does not guarantee future results. This guide is education, not financial advice.

Frequently asked

What is a good win rate in trading?

One that is above the break-even rate for your reward-to-risk ratio. With 1:1 trades that means above 50%; with 1:2 trades above 33%; with 1:3 trades above 25%. Most profitable traders win between about 35% and 60% of trades.

Is a 40% win rate good?

Yes, if your average winner is at least 1.5 times your average loser. With a 1:2 reward-to-risk ratio, a 40% win rate gives +0.2R per trade before costs.

Is a 70% win rate good?

Only if your losers are not much bigger than your winners. With a 70% win rate and winners of 0.3R against 1R losers, the strategy loses money over time.

How do I calculate my break-even win rate?

Divide 1 by (1 + R), where R is your average winner divided by your average loser. A 1:2 ratio gives 1 ÷ 3 = 33.3%.

How many trades do I need to know my win rate?

At least 50, and preferably 100 or more taken with the same rules. Smaller samples can be badly distorted by a lucky or unlucky streak.