Winrate and Profit Ratio Explained: How to Measure Trading Success

Winrate and Profit Ratio Explained: How to Measure Trading Success

Winrate and Profit Ratio are two key indicators that provide a complete picture of your trading strategy. But don’t confuse them: they complement each other and help you see the real picture.

Winrate and Profit Ratio

Winrate and Profit Ratio on the TradeLink Passport plarform

What is Winrate?

Winrate is the percentage of profitable days over the total trading days.

Formula: Winrate = (Number of profitable days / Total number of active days) × 100

Example: If you have 60 profitable days out of 100 trading days, your Winrate = 60%.

A high Winrate (for example, 80%+) means your strategy frequently results in profits, but it’s important to remember that this doesn’t always guarantee success if you don’t consider the profit-to-loss ratio — Profit Ratio.

What is Profit Ratio?

Profit Ratio is the ratio of average profit to average loss per trade.

Formula: Profit Ratio = Average profit per trade / Average loss per trade

Profit Ratio shows how profitable each trade is in your strategy. Example: If the average profit per trade is $200, and the average loss is $100, your Profit Ratio = 2. This means each profitable trade is twice as large as your losses.

A high Profit Ratio (e.g., >1.5) indicates that even with a smaller number of profitable trades, you can still stay in profit if losses are controlled.

Why is it important to analyze both indicators?

Winrate and Profit Ratio together create a balance: 

High Winrate, but low Profit Ratio — you frequently close trades in profit, but if the profit per trade is small, it may not cover occasional large losses. 

Low Winrate, but high Profit Ratio — you rarely close trades in profit, but each profitable trade significantly outweighs the losses.

We have both of these indicators — Winrate and Profit Ratio — for the entire history of your trading.

Easily analyze the statistics of your trading strategy with clear metrics, find weaknesses, and improve your results. Every insight matters. Explore on TradeLink Passport.