Win rate is a vanity metric
Posted: Fri Oct 30, 2026 6:18 am
Scalpers love high win rates. Seventy, eighty percent feels like mastery. But win rate alone says nothing about profitability.
A system that wins ninety percent of the time can still lose money if the average loss is twelve times the average win. It happens often with strategies that use tight targets and wide stops, or with those that average down and hold losers.
The danger is psychological. A long string of small wins builds confidence, then one large loss wipes out weeks of gains, and the feeling is of an unfair market instead of a predictable result.
Compare these two systems:
- System A: 85 percent wins, average win 2 pips, average loss 12 pips.
- System B: 45 percent wins, average win 5 pips, average loss 3 pips.
System A's expectancy is 1.7 minus 1.8, so negative 0.1. System B's is 2.25 minus 1.65, so positive 0.6. The second feels worse to trade and works better.
What are the actual numbers for win rate, average win, and average loss, and which of the three is the weakest link?
A system that wins ninety percent of the time can still lose money if the average loss is twelve times the average win. It happens often with strategies that use tight targets and wide stops, or with those that average down and hold losers.
The danger is psychological. A long string of small wins builds confidence, then one large loss wipes out weeks of gains, and the feeling is of an unfair market instead of a predictable result.
Compare these two systems:
- System A: 85 percent wins, average win 2 pips, average loss 12 pips.
- System B: 45 percent wins, average win 5 pips, average loss 3 pips.
System A's expectancy is 1.7 minus 1.8, so negative 0.1. System B's is 2.25 minus 1.65, so positive 0.6. The second feels worse to trade and works better.
What are the actual numbers for win rate, average win, and average loss, and which of the three is the weakest link?